Cross-Party Group calls for more and better banking hubs following staggering rates of bank branch closures
A cross-Party Parliamentary Group has today called for an acceleration in the rollout of banking hubs, and for communities to be empowered to request one for their high street. They also want to see banking hubs enhanced with more banks involved, longer opening hours, and a wider standardised range of services offered to consumers and businesses.
The publication of today’s report on access to banking services follows a detailed inquiry by the Future of Financial Services APPG, which found a staggering reduction in the number of bank and building society branches from 21,500 in the mid-1980s to only 4,800 now – a reduction of almost 80%.
This has had a catastrophic impact on many high streets and communities, with elderly and disabled consumers and SMEs particularly badly hit. Banking hubs have picked up some of the slack but their roll-out remains slow and public awareness of them is too low. There are still only 150 banking hubs in the UK.
In its report, the Future of Financial Services APPG does note some encouraging signs of innovation. Co-locating banking services with other public amenities reduces overheads and can give communities a much-needed boost. Some digital financial services providers are also recognising the benefits of face-to-face banking and offering customers access relationship managers who can provide helpful guidance.
Digital banking has grown impressively, offering convenient access for many millions of people and businesses, and digital banks rank highly for service quality. However, there are a significant number of people who can’t access digital services, require face-to-face assistance, or simply prefer to use physical cash.
The Future of Financial Services APPG calls for a loosening of the rules that dictate when and where banking hubs can be set up, as well as for smaller banks to be able to join the hubs, hours of service to be extended, and for digital literacy lessons to be delivered there.
It also recommends regulatory changes to make it easier for challenger banks to compete with the big six banks on the high street driving competition and improve outcomes for consumers.
Commenting on the findings of the inquiry, Co-chair of the Future of Financial Services APPG, Peter Bedford MP, said: “Bank and building societies remain an integral part of the fabric of our communities, supporting local businesses and the everyday activities of local people. Widespread branch closures have ripped the heart out of our high streets, and it is imperative to communities up and down the UK that this is addressed. If we’re serious about economic growth that benefits the whole of society, it is vital that we ensure everyone has access to the financial services they need.”
APPG co-chair Lord Sharkey added: “Like many services, banking is evolving. The UK is a proud world-leader in digital banking, but in parallel many communities have had their access to banking throttled as physical branches have rapidly dwindled. Our recommendations promote innovation and reconnect communities to ensure everyone can access the banking services they need to thrive.”