The UK banking industry is to help local communities identify and secure ‘appropriate free access to cash for customers’. In particular, trade body UK Finance will look at how the banking and finance industry can improve customer outcomes.
It is to build an overview of the range of channels currently available on a community by community basis.
And one of the first things it will need to do is define ‘appropriate’ free access to cash.
UK Finance is building on the Access to Cash Review, chaired by Natalie Ceeney.
The independent Access to Cash Review considers consumer requirements for cash over the next five to 15 years.
Specifically, the review examines future trends in cash usage and ATM coverage.
Last year, the number of ATMs worldwide fell for the first time, by 1% to around 3.2 million according to research from RBR.
Notably, the number of UK ATMs is down by around 1,500 in the first half of 2019 to about 68,400.
But cash remains the UK’s second most frequently used payment method despite the ongoing growth of card and mobile payments.
Free access to cash: but cash use to fall from 28% to 10% in a decade
According to UK Finance’s latest Payment Markets report, cash was used for 28% of payments in 2018. That figure is forecast to fall to one in ten payments in a decade’s time.
UK Finance and the Joint Authorities Cash Strategy Group will ensure free access to cash for those who need it. More detailed work is required to understand the future cash needs of local communities according to the trade body.
This is particularly the case in remote rural and urban deprived communities.
UK Finance will engage with consumer representatives, local authority representatives and market participants, including LINK and its members.
Free access to cash: specific measures include:
- mapping the range of channels through which consumers can access cash (e.g. bank and building society networks; post office, ATMs;
- considering the potential of a number of industry pilots already underway to deliver new options for cash provision;
- developing an approach for how industry could work with local authorities to help communities to identify and report gaps in cash provision, and
- developing a definition of industry’s commitment to customers and communities of ‘appropriate provision for free access to cash’.
UK Finance says that the new approach could involve the creation of an independent body. This would have responsibility for responding to access to cash representations and coordinating and facilitating appropriate industry action.
In addition, UK Finance will work with LINK, the Post Office and the Payment Systems Regulator (PSR). The parties will identify ways in which the existing commitments and delivery against them can be developed and improved.
Meantime, UK Finance will continue to work closely with the PSR, Financial Conduct Authority (FCA), Bank of England and government.
Shared objective: government, regulators, banks and communities
Securing free access to cash for those who continue to need to use it is a clear shared objective. Government, regulators, industry, customer groups and communities need to come together. We need to take a collaborative approach to the problem and work out a shared solution
The banking and finance industry is setting out a clear statement of intent and a series of practical next steps. This will ensure that cash will remain widely accessible and free for those that need it to help manage their finances and pay for goods and services,” says Stephen Jones, CEO of UK Finance.
City Minister, John Glen, adds:“While technology is transforming how we manage our finances, for many cash remains a vital part of their day-to-day spending. This is why I recently announced that we’ll be protecting the future of cash.
“We are co-coordinating work across government and industry, and pushing for further action to ensure continued access. UK Finance’s upcoming work in this area is therefore extremely welcome. It will help us to build on these efforts, support communities and provide choice over how they spend their money.”