Business is booming.

‘One hundred banking hubs to be open this year’

[ad_1]

Unlock the Editor’s Digest for free

The organisation tasked with setting up physical “banking hubs” in areas where high street banks have retreated has opened its 50th hub and renewed its pledge to launch 100 by the end of the year, after facing scrutiny over the speed of the rollout.

Cash Access UK, which was set up last year and is funded by nine of the country’s major lenders, on Friday announced its latest hub was open to consumers in Jedburgh in Scotland.

Banking hubs are shared banking spaces on the high street that offer counter service jointly operated by lenders and the Post Office where customers of major banks and building societies can pay their bills, seek banking advice, and deposit cash and cheques.

The so-called community bankers who staff the hubs, in partnership with Post Office postmasters, work on rotation, with a different bank available on each day of the week. Member banks funding the scheme include Bank of Ireland, Barclays, Danske Bank, HSBC UK, Lloyds Banking Group, NatWest Group, Santander, TSB and Virgin Money.

The announcement this week follows a wave of criticism from campaigners and regulators that the opening of banking hubs had been too slow. In 2022, Financial Conduct Authority chief executive Nikhil Rathi called on funders of the scheme to speed it up.

Cash Access UK chief executive Gareth Oakley said opening a new banking hub took at least a year as it depended on bank closure announcements and finding suitable properties.

Campaigners also point out that Nationwide’s exit from the membership organisation last year means banking hubs cannot open in areas where there remains a Nationwide branch, which the building society has pledged to keep until 2028.

While retail banks increasingly shun the high street to turn their focus on digital services, many people remain dependent on cash. ATM network operator Link estimates that 5mn people use it daily in the UK.

Data from the British Bankers’ Association, now part of trade body UK Finance, and the Office for National Statistics (ONS) shows the number of UK bank branches fell from nearly 15,000 in the late 1980s to below 6,000 in 2023.

The number of operational building society branches fell from 6,954 to 1,925 in the same period.

“It would not surprise me if it was down to 1,500 [branches] by the end of the next parliament,” said John Howells, chief executive of Link, an ATM network provider. “That’s an enormous reduction in bank branches . . . But if alongside [that] we’re also going to have 1,000 new banking hubs that is a major new national network.”

Bim Afolami, economic secretary to the Treasury, welcomed the rollout of the hubs which he said ensured that “communities up and down the country have sufficient access to cash and banking services”.

The progress comes after financial regulators were last year granted new powers to protect access to cash as the FCA became mandated to guarantee that 95 per cent of people would have to travel no further than three miles to withdraw money.

The Labour party has pledged to extend the regulator’s powers to include guaranteeing face-to-face access in addition to cash services, if elected. Banks currently offer face-to-face services that allow customers to discuss their banking issues with staff on a voluntary basis.

Oakley said hubs were “extremely popular” and served hundreds of customers every day while bringing “energy and life” to the communities they are serving.

Tim Allen, director of banking access and branch platforms at Barclays, who sits on the board of Cash Access UK, said banking hubs served “the more vulnerable members of our society that have a high reliance on cash.”

“Customers love them,” said Allen. “If it was a banking brand, they’d be top of the [customer satisfaction] table.”

[ad_2]

Source link