Financial regulators have spoken about modifications to native banking providers. Nikhil Rathi, chief government of the Financial Conduct Authority, spoke to the Treasury Committee about sustaining in-person providers across the UK. As the high road banks close more of their banches, many communities are having to get by with lowered banking providers and access to money.
However, the FCA does implement certain guidelines around this. New laws came into pressure in 2024 requiring banks who need to close a department to carry out an evaluation of how withdrawal and deposits providers in an space would be affected.
Banking hubs are also being set up in areas dropping branches, which are shared hubs when you can access providers from many of the large title banks. However, Mr Rathi said some banks are now wanting to keep their branches open.
He said: “It’s interesting how the commercial decisions are starting to change. You’re starting to see more of the major financial institutions actually seek to make a virtue of the fact that they’re going to keep branches open for a certain period. That is a shift.”
He was requested for examples with the committee mentioning Nationwide. Mr Rathi said HSBC had also lately made an announcement about conserving its branches open.
Nationwide lately announced it would keep all 605 of its present branches open until at least 2030. HSBC has also dedicated to conserving all its present branches open, until at least 2027.
However, Mr Rathi was also eager to point out some smaller suppliers who are serving to keep in-person providers. He said: “I’m always nervous about naming firms because there are always smaller institutions.
“We were in Rochdale as a group a couple of weeks in the past. Mutuals are very current in their communities and offering more providers. The Manchester Building Society just opened a department in central Manchester, including on a weekend, to present providers to a neighborhood that was otherwise not getting access. So it’s not just the large establishments.”
A range of ways
The FCS boss was pressed by the committee if he would look into the issue of face-to-face banking and maintaing proper access to cash. He said: “We are mindful of that. At the same time, we must stay with the remit that Parliament set for us around what the definition of access to money was.
“The settled position was there can be a range of ways in which access to cash can be provided. Sometimes it’s a Post Office counter, sometimes it’s a banking hub, sometimes it’s a branch, sometimes it’s a deposit solution for small businesses.
“There’s a vary of completely different options, which is why LINK has been requested in each case to do a detailed community-based evaluation.
“In some areas, particularly rural areas. We’ve heard there are very specific issues around rurality which sometimes require solutions which go beyond input solutions.
“Particularly susceptible prospects who are not in a position to get out of their houses simply – in individual [services] is not going to clear up their situation on its own. That’s why there’s a vary of issues you have to look at.”
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