UK Finance: No silver bullet for solving local access to cash

Source: UK Finance

UK Finance is today providing an update on the banking and finance industry’s commitment to help local communities secure appropriate free access to cash for customers.

This follows the UK Finance announcement on 12 June 2019 which outlined proposed activity in support of the Access to Cash Review, and aligning with the existing activity undertaken by LINK.

Over the summer, UK Finance has been engaging with consumer representatives, local authority representatives and market participants, including LINK and its members, on the cash needs of local communities. Through this work it has become apparent that (outside of LINK’s welcome commitment on ATM provision) the sustainability of the wider system to meet customer cash needs relies on strengthening complementary non-ATM solutions for cash and payment access. UK Finance’s forward focus will include the ‘recycling’ of cash in local communities, improving access to digital alternatives and the engagement of key technology and infrastructure partners.

Complementary to LINK’s commitments, UK Finance will be focusing on solutions in the following five key areas:
1. Commitment to LINK and the Post Office: UK Finance welcomes LINK’s recent announcement on securing free cash access in key retail centres, supported by a strengthening of the Financial Inclusion programme for key communities. UK Finance members support and fund LINK and contracts with the Post Office (through the Banking Framework) to use 11,500 branches nationwide and will continue to monitor the effectiveness of cash provision through these channels closely and take action to improve delivery where necessary.
2. The Community Access to Cash Initiative: UK Finance is today launching this initiative to facilitate cross-industry work with local communities, through their elected officials (including MPs, members of devolved parliaments and assemblies, mayors and councillors), to help identify, report and address gaps and barriers to cash and payment provision. The initiative will provide grant support and industry guidance to local communities to improve access to cash and the adoption of alternative solutions where an ATM is not appropriate or required. Applications for grant support will be community-led and should be focused on building towards long-term solutions, for example:
• Digital education awareness programmes
• Driving community cashback
• Helping local communities to connect with partners who can increase awareness of, and access to, available and secure cash provision
Applications can be submitted via LINK’s website from 31 October 2019 through to 31 January 2020, with awards to be made by 31 March 2020. The assessment and award of grants will be considered by a UK Finance Award Committee made up of a cross-section of member representatives. Natalie Ceeney CBE has kindly agreed to Chair the inaugural meeting of the Award Committee in an independent capacity.
3. Local community cash recycling: UK Finance believes that retailer cashback has a more significant role to play and can support the efficient recycling of cash in local communities, as well as providing much needed support for High Streets generally. Cashback can drive a healthy and efficient local cash ecosystem, whereby cash spend in shops is re-drawn and spent again locally, rather than directed back to central hubs for redistribution. UK Finance will monitor and support various retailer cashback pilots and initiatives that have the ability to drive efficient recycling of cash in local communities. UK Finance is encouraged by the positive dialogue it has held with regulators on supporting cashback initiatives which are in train.
4. Access to digital innovation: UK Finance will work with key stakeholders, including Natalie Ceeney CBE, the UK and devolved governments, regulators and consumer representatives to encourage delivery of innovative digital solutions and help enable everyone to use digital payments through improving access to digital infrastructure and capabilities.
5. Awareness and mapping: UK Finance will develop awareness campaigns and a comprehensive map of the available channels through which consumers can access cash (e.g. bank and building society networks, post office, ATMs, merchant cashback, etc). UK Finance continues to believe that in a world of data, providing customers with information about where they can access cash is fundamental, particularly as more channels come online. The banking and finance industry is now seeking partners to build a mapping capability which would provide consumers with information on their nearest free-to-use cash outlet.

Next Steps and Call for Partners
UK Finance will continue to work closely with HM Treasury, Bank of England, regulators, Natalie Ceeney CBE, consumer groups and the UK Finance Consumer Advisory Group as work is progressed on access to cash.
It has become increasingly clear that solutions to the access to cash challenge will be found through collaboration beyond the banking and finance industry.

The challenges and opportunities faced in securing appropriate access to cash and payment services for consumers are shared by the whole of society. UK Finance is therefore calling for partners across industries, including telecommunications and ‘Big-Tech’ companies, retailers and payment innovators, to engage on the solutions in the above areas.

Stephen Jones, Chief Executive of UK Finance, said: “The banking and finance industry is committed to ensuring access to cash remains free and widely accessible for those that continue to need it. Yet there is no ‘one size fits all’ approach and only via collaboration across government, regulators, industry, customer groups and communities can this be achieved. Understanding the needs of local communities is critical and the new Community Access to Cash Initiative will help identify the most appropriate access to cash and payment service solutions. Local cash recycling will play a pivotal role in the sustainability of the system, although we can’t achieve a resilient and sustainable cash landscape on our own. It is vital we are supported by other sectors such as telecoms, retailers and infrastructure providers to assure widespread provision.”

City minister, John Glen, said: “Technology is transforming how we manage our money, but with 11 billion payments made in cash last year we know that access remains a critical issue for many. Today’s announcement shows the industry stepping up to the plate to ensure access to cash for people who need it, while also helping them to take advantage of the digital innovations that are giving so many of us greater control over our finances.”

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