As banks continue to close branches, more shared banking hubs will open in UK towns and villages.
Major banks have signed a new voluntary agreement that requires an independent assessment of local needs every time a branch closes.
These reviews may suggest that a shared branch be opened, an ATM be installed, or a Post Office be upgraded. Banks will commit to delivering whatever is suggested.
This should ensure that cash is available to vulnerable customers and businesses.
An estimated five million people still use cash, and basic banking services are regarded as critical to the survival of notes and coins. Small businesses, for example, that are unable to deposit their receipts nearby may choose to accept only card payments rather than cash payments.
When a core banking service, such as a cash machine or bank branch, is closed, Link – the organization that currently oversees the UK’s ATM network – will conduct an assessment.
The review will look at the community’s cash needs, such as how easy it is to get to the nearest alternative service, as well as the demographics and vulnerability of the local residents. A group of banks and consumer representatives set the criteria.
Over the past year, evaluation trials have resulted in 11 new ATMs, improved cash services in 30 Post Offices, and five new shared banking hubs, all of which will open in early 2022.
The operating costs are the same as those of a small branch, but they are shared by the various banking groups that use it.
Acton in London, Syston in Leicestershire, Knaresborough in North Yorkshire, Carnoustie in Angus, and Brixham in Devon will all get new shared bank branches.
They have seen their last bank close, and customers must travel long distances to reach the nearest branch services.
While shared hubs may be welcomed in these communities, the five hubs planned and the promise of more to come will be dwarfed by the scale of bank branch closures across the UK.
More than 4,000 branches have closed since the beginning of 2015, with another 220 scheduled to close next year.
Which?, a consumer group, has called for an immediate halt to further closures so that new plans and legislation can be implemented.
The pandemic has reduced cash use by 35%, but millions of people, many of whom are vulnerable, continue to rely on notes and coins.
Another system that trial results showed to be successful in certain venues was cashback from shop tills, which did not require a purchase.
During the trials, half of the withdrawals were for less than £20, and four out of ten were for non-round amounts, indicating that people were withdrawing relatively small amounts from their bank accounts.
Cash machines are not designed to provide such customized service.
By the end of the year, 2,000 stores are expected to offer the service.