FCA proposes new rules to maintain reasonable access to cash
The UK Financial Conduct Authority (FCA) has proposed new rules to maintain reasonable access to cash for personal and business customers across the UK. This follows new powers granted to the FCA by the Financial Services and Markets Act 2023.
Under the FCA’s proposals, designated banks and building societies will need to assess gaps in access to cash. These assessments need to take into account local factors such as demographics and transport. Where firms identify gaps, they will need to act to address these needs.
As of Q1 2023, 95.1% of the UK population are within 1 mile of a free to use cash withdrawal point, such as cash machines or Post Office branches. 99.7% of the UK population are within 3 miles. However, the availability of cash access services can impact local communities, economies and high streets, and so it’s important to meet local needs – which may change over time.
Under the proposals, designated firms will be required to:
- Undertake cash access assessments when changes are being made to cash access services – to understand whether additional services are required to meet local gaps.
- Respond to requests from local residents, community organisations and representatives to consider, assess and plug gaps.
- Deliver reasonable additional cash services to fill gaps in provision where assessments show that there is or will be a significant local gap.
- Ensure they do not close cash facilities, including bank branches, until any additional cash services identified are available.
The FCA’s new powers do not prevent bank branches from closing. However, the rules will have an impact where branches are a key local source of cash. The FCA will ensure these rules work in harmony with its existing guidance on bank branch closures.
Existing law allows retailers to decide whether to accept cash or not – so the FCA cannot require them to do so.
The consultation is open until 8 February. The FCA expects to finalise the rules by Q3 of 2024.