The Financial Conduct Authority is planning tougher curbs on bank branch closures, warning that some banks and building societies are not currently doing enough to properly understand the impact of shutdowns on local communities.
Under updated guidance proposed by the FCA, banks and building societies will need to assess the impact of changes to their services, for example shorter branch opening times.
The FCA is also consulting on requirements for more detailed analysis on how firms assess the impact on customers when they plan to close a branch, remove or convert an ATM or reduce the services they provide.
So far this year 214 bank branches have closed in the UK, and a further 272 are scheduled to shut by the end of December, as the nation's largest lenders respond to declining footfall and the rise in popularity of online and mobile banking. Both Santander and HSBC have reacted by cutting branch opening times across their network, moving to an appointment-only model in the late afternoon.
The proposed update to the regulatory guidance comes in the wake of previous warnings by the FCA to banks about branch closures during the pandemic and the recently-announced Government plan to give the regulatory body news powers to protect access to cash.
Sheldon Mills, executive director of consumers and competition at the FCA, says: "‘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. 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."