FCA consults on strengthening access to banking

FCA has warned that some banks and building societies are not currently doing enough to properly understand the impact of branch closures, ATM conversions or service reductions and to keep their customers informed of such changes.

Under new proposals, banks and building societies will need to assess the impact of changes to their services. In particular, FCA proposals include:

  • extending current FCA guidance so that it applies where firms partially close a branch in the same way as it does to full closures;
  • requiring firms to consider the impact of providing in-person banking services at other venues, which may be “branches” and then changing or withdrawing them;
  • firms’ analysis prior to closing a branch, should include usage trends and overall transaction volumes across a suitably representative time period;
  • firms to identify relevant organisations (such as local charities and councils), to tell them about the branch closure or conversion plans, and give them information that enables them to understand how they can engage with the firm during and after the closure or conversion, in addition to the current expectation of telling customers of proposals no less than 12 weeks before implementing them; and
  • ensuring that where a branch is identified for closure, the effective migration of services, to a channel which customers will find accessible, should be part of the pre-closure planning.

These proposals are part of the FCA’s plan to protect access to banking services, including accessing cash at branches. The consultation closes on 26 July 2022.

Harshil Patel