The UK’s Financial Conduct Authority (FCA) has proposed updated guidance which will require banks and building societies to thoroughly assess the impact of changes to their services as it looks to strengthen the protection of access to banking services and curb the ever-increasing number of branch closures in the country.
This new guidance will include assessing the impact of shorter branch opening times, planned branch closures, removal or conversion of ATMs or reduction in the services they provide.
The FCA has warned that “some banks and building societies are not currently doing enough to properly understand the impact of these changes and to keep their customers informed”.
The proposal also includes communicating with other groups such as local charities and councils to understand the wider impact from changes to services.
In 2020, initial guidance on branch closures and conversions was published in the wake of the pandemic, with the FCA saying the proposed update is the latest step it has taken to “protect access to banking services, which includes accessing cash at branches”.
“We expect firms to continue to offer easy and accessible banking services to their customers, and this is even more important as the country faces a cost-of-living crisis,” says Sheldon Mills, executive director of consumers and competition at the FCA.
“We saw firms successfully do this and support consumers through the pandemic, and this standard needs to continue with firms really thinking about their customers, especially those in vulnerable circumstances, and ensuring they continue to meet their needs.”
2022 has seen a wave of branch closures from major high street banks.
Barclays is set to close 27 more branches by the end of August. The closures mean the firm will have shuttered 103 branches by the end of the year, according to Which?
In March, Lloyds Banking Group said it planned to close a further 60 high street branches across the UK in 2022. In June last year, Lloyds earmarked 44 branches for closure, on top of the 56 outlined in June 2020.