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JEFF PRESTRIDGE: Access to cash needs the human touch

JEFF PRESTRIDGE: The government should be applauded for outlining plans to ensure national access to cash, but let’s not get too carried away.

How ironic that on the day the Government outlined its legislative plans to safeguard cash on High Street, Lloyds Bank brought another wrecking ball to its branch network.

How many more such destructive ball moves will be unleashed by the big banks before the Government finally gets its welcome legislation through Parliament sometime next year? Enough I’m afraid.

Although the government, currently short of friends, is to be applauded for finally outlining its legislative plans to ensure national access to cash, let us not get too carried away.

Another one bites the dust: the delay in the government legislation has unleashed a proverbial bonfire of branches and ATMs that are free to use.

Another one bites the dust: the delay in the government legislation has unleashed a proverbial bonfire of branches and ATMs that are free to use.

After all, the government said it would legislate more than two years ago, only for the pandemic to push its promise into the tall grass.

The delay has sparked a proverbial bonfire of free-to-use branches and ATMs.

Banks have used the cover of lockdowns to make their sacrifice with little more than a groan of protest as work-at-home and online shopping became the norm. (Most of the protest is funneled through our Personal Finance pages.)

The rise and rise of contactless payments and mobile banking has given the big banks the perfect excuse to close branches, claiming that cash is no longer king.

Already this year, 227 branches have been closed or notified of imminent closure, more than a third are Lloyds Bank brands (Bank of Scotland, Halifax and Lloyds).

I imagine that by the time the legislation finally hits the statute book, a similar amount will have been given, probably more. And, surely, no one in the Government will have flinched.

Although the meat of the planned legislation is slim, we know it will form part of the Financial Services and Markets Bill.

We have also been told that banks will need to provide both consumers and small businesses with convenient access to cash and cash deposit facilities.

How convenient we do not know, that has not yet been resolved. But the theory is that we will never be that far from cash, even if we are uphill like I was last week in the Lake District. Standing on top of Loughrigg Fell and looking down on glorious Rydal Water, I was still no more than 40 minutes from a number of ATMs (but no bank branches) in Ambleside.

The new legislation will be overseen by the great and good of the Financial Conduct Authority. When they’re not on strike, they’ll make sure the banks play by the rules.

How effective the regulator will be remains to be seen, but it is better than the current regime that allows banks virtually free rein in closing branches and ATMs.

It is encouraging that people like Natalie Ceeney, the leading expert on access to cash, support the government’s plan to legislate.

Last week, you made an excellent point about the need for continued access to cash, in the context of the current cost of living crisis.

“Cash dependency is not simply about age,” he told me, referring to the fact that it is often argued that only older people depend on cash.

‘The biggest driver of cash dependency is poverty: access to cash is vital for the 1.5 million households who cannot afford internet access and the millions who do not have a smartphone.’

He added: “So I commend the Government for its commitment to supporting the most vulnerable people in society, small businesses and remote and rural communities.”

What I, and other banking experts like the respected Derek French, fear is that access to cash will become increasingly impersonal, available primarily through ATMs or cash-back services in stores.

Sadly, high street bank branches, which offer access to in-person advice, will continue to get the wrecking ball treatment.

Perhaps shared banking centers, much championed by Personal Finance and French, will finally catch on, giving customers the chance to talk to their bank staff on select days. Hope so.

Easy access to main street to cash, yes please.

But let’s not forget the human touch.

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