Efforts to secure access to cash for consumers and businesses are being stepped up through a series of new rules to be imposed by the City watchdog.
The Financial Conduct Authority (FCA) said that from 18 September, banks and building societies would face greater obligations to weigh if local communities lack access to services, like branches and ATMs, and to plug “significant gaps”.
The new obligations would require them to act if assessments, which can be requested by local areas, find difficulties in the provision of basic services including the ability to bank cash.
Lenders would also have to keep a service, including a branch or cash machine, open until such time as a replacement is identified or operational.
Failures to abide by the rules could ultimately lead to an unlimited fine, the FCA said.
The regulatory framework covers the operations of the 14 largest lenders on the high street.
They will have the ability to review cash provision every two years.
The banking sector has long been accused of leaving communities cut off through swathes of branch closures since the financial crisis.
Around 6,000 sites have been shut over the past nine years under cost-cutting measures which lenders insist reflect the shift to digital banking from branch-based activity.
Critics accuse the industry of neglecting rural communities and the vulnerable, such as the elderly, who are far less likely to be tech savvy.
Industry data, released separately on Wednesday, backed up the banks’ assertions that habits are continually evolving as new services come online thanks to investment.
The UK Finance report on UK payment trends during 2023 showed cash remained the second most popular payment method despite falling to six billion transactions – a share of 12%.
The data showed 38% of the 48…
