Finance

Cash in crisis as half of bank branches disappear in seven years

Cash in crisis as half of bank branches disappear in seven years
Written by MAGASIR

More than one million people mainly use cash when doing their day-to-day shopping, according to UK Finance, a trade body.

Caroline Abrahams, of the charity Age UK, said: “For people who are not familiar with digital banking, these closures can make life very difficult.

“Older people are often fiercely independent and want to keep managing their own affairs. But isolating them from their local banks could undermine their financial independence. At best they will be inconvenient, but at worst they risk being cut off from their money.”

She said that pushing unprepared customers online could leave them more vulnerable to scams. Online fraud has stimulated during the cost of living crisis, as criminals target victims with money worries.

Ms Abrahams said: “Banks have introduced lots of barriers to help protect your money online, but it makes the process more complicated.

“Take two-factor authentication [where extra verification is used to prove an identity] – more often than not, a smartphone is required and lots of elderly people do not have one.”

The ATM network Link recently found that nearly half of people have been somewhere where cash has not been accepted, or has been discouraged.

Graham Mott, director of strategy at Link, said: “Despite all the talk about the death of cash, I think it is worth reminding ourselves of how important cash is. Compared to 2021, the number of transactions this year is up around 5pc. Year-on-year we’re also seeing people take out more cash when they visit cash machines.”

An FCA spokesperson said: “We expect firms to continue to offer accessible banking services to all their customers and to ensure they can continue meeting the needs of customers, especially those in vulnerable circumstances, before closing a branch or reducing services.

“Firms should make sure any closure plans are explained clearly and they should offer alternative solutions, such as Banking Hubs, if necessary.”

UK Finance’s figures show that 1.1 million people mainly use cash when doing their day-to-day shopping. A spokesperson said: “The overall number of cash payments decreased by 1.7pc last year and we expect cash usage to continue to fall, with cash forecast to account for 6pc of all payments made in the UK by 2031.

“The banking and finance industry is committed to preserving access to cash for those who need it, including through banking hubs, free ATMs, enhanced Post Office services and cashback without purchase.”

Regarding bank branch closures, the spokespersonsman said: “While many customers are opting to use mobile and online banking to manage their money, the banking industry is committed to ensuring that people can do their banking face-to-face too.
“Whenever a bank branch closes, Link independently assesses the local community’s cash access needs and will commission any new services required, which can include a banking hub.”

A Barclays spokesperson said: “We are maintaining our community presence with alternative options for customers who still require in-person support. This includes our network of Barclays Local sites in service libraries and community centres, bank pods and mobile purchase vans, our cashback without purchase , Shared Banking Hubs and everyday banking at the Post Office.”

A spokesperson for NatWest Group, which includes the Royal Bank of Scotland, said that it was investing to support people who face challenges moving online. Lloyds declined to comment.

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