The UK Financial Conduct Authority (FCA) suggested new rules to maintain reasonable access to cash for personal and business customers across the UK. This follows new powers given to the FCA by the Financial Services and Markets Act 2023.
Under the FCA’s proposals, designated banks and construction companies will need to assess gaps in access to cash. These assessments must take into account local factors such as demographics and transportation. Where businesses identify gaps, they should act to address those needs.
As of Q1 2023, 95.1% of the UK population is within 1 mile of a free cash withdrawal point, such as cash machines or post office branches. 99.7% of the UK population is within 3 miles. However, the availability of cash access services can affect local communities, economies and high streets, so it is important to meet local needs – which may change over time.
Under the proposals, designated companies should:
- Conduct cash access assessments when changes are made to cash access services – to understand if additional services are needed to fill local gaps.
- Respond to requests from local residents, community organizations and representatives to review, assess and fill gaps.
- Provide reasonable additional cash services to cover gaps in provision where assessments show there is or will be a significant local gap.
- Ensure that they do not close cash facilities, including bank branches, until additional cash services are identified.
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 that these rules work in harmony with its existing guidance on bank branch closures.
Existing law allows retailers to decide whether or not to accept cash – so the FCA cannot require them to do so.
The consultation is open until 8 February. The FCA expects to finalize the rules by the third quarter of 2024.