UK regulator calls on banks to reconsider wave of branch closures
The FCA is asking banks to consider the needs of their vulnerable and hard-to-reach customers before shutting up shop.
The plea comes as several highstreet banks have announced the closure of hundreds of branches across the country.
In an update posted yesterday by the regulator, it asked banks to “consider pausing or delaying new branch closures where possible, particularly where this could have [a] significant impact on vulnerable customers.”
In September 2020, the FCA introduced new requirements for banks considering closing branches, ensuring that customer needs and the ability to access their bank through alternative means, such as online banking, were taken into consideration.
The new rules ensure that vulnerable and hard-to-reach customers are made aware of the potential closures to help them make other arrangements, such as helping them access online banking and make payments.
Just last week HSBC announced plans to shutter 82 branches up and down the country as the Covid-19 pandemic has driven more people to access their bank accounts and make payments using alternative methods, such as mobile or online banking.
In fact, recent data from App Annie showed that banking apps from incumbent banks were some of the most downloaded in 2020.
Across the board, Barclays, Lloyds and NatWest were in the top five most downloaded apps, while for Millennials, a traditionally fintech-friendly age group, banks such as Halifax and Barclays were two of the most downloaded banking apps.
In April 2020, the regulator upped the contactless limit from £30 up to £45 in an attempt to slow the spread of the Covid-19 virus after World Health Organisation urged people to use the alternative payment method because it was found that banknotes could harbour the Covid-19 virus for several days.
Now, nearly 90 per cent of all transactions are made using the touch-free payment method and, following the limit increase, the average value of contactless payments jumped by nearly a third, from £9.60 in 2019 to £12.38 in 2020.