Major lenders in the UK will support a new initiative to maintain access to money for communities across the country with five new joint bank branches scheduled to open next year.
The move follows a review of several different pilot schemes aimed at maintaining access to cash services in hard-hit areas. closing bank branches over the past decade.
In a report released Wednesday, the industry-backed Access to Cash Action Group (Acag) said tests showed so-called “banking hubs” – joint ventures together run the Post Office and lenders – proved to be the most popular approach. The hubs have a number of common bankers from participating institutions.
New joint ventures will open next year at four locations in England – Acton, West London, Brixham in Devon, Knaresborough in North Yorkshire and Syston in Leicestershire – and one in Carnoustie in Angus, Scotland.
The initiative followed two trials of the banking hub concept in Rochford in Essex and Cambuslang outside Glasgow that began earlier this year. They were originally extended until April 2023 and will now last indefinitely.
Lenders including Barclays, HSBC, Lloyds, NatWest, Santander, TSB and Danske Bank, as well as Britain’s largest construction company Nationwide, have signed the program for the next two years.
Natalie Ceeney, president of Acaga, welcomed the expansion of the banking center initiative. “We know that the demand for cash is declining, but we also know that it continues to play a vital role in the lives of at least 5 million people in the UK – including some of the most vulnerable in society.”
Although the pandemic has accelerated the adoption of cashless payment technology, difficulties in accessing cash in many communities also reflect long-term changes. The number of bank branches fell from more than 11,300 in 2012 to less than 7,000, according to the Office for National Statistics.
Their disappearance has raised concerns for certain groups, including the elderly and disadvantaged, who are still dependent on cash and forced to travel considerable distances to access it or have to rely on third parties.
The closure of branches has also led to a reduction in the number of ATMs, and the Acaga report states that free ATMs for some places could be a more convenient and simpler solution. Link, which operates the largest ATM network in the UK, has been given the role of assessing the needs of affected communities.
“Our relationship with cash is changing, but the UK is not ready to be a non-cash society,” said John Howells, Link’s CEO. “Free access to cash remains crucial for many consumers and communities.” As part of the cash access scheme, Link will install 11 free ATMs in different communities across the UK.
To further increase access to cash, a law came into force this year that allows people to use the “cashback” service in participating stores without prior purchase. The introduction will reach 2,000 traders by the end of 2021, according to Link.