After raft of closures… at last a lifeline for your local bank

A key report mapping out how the banks intend to help preserve nationwide access to cash and branches on the high street is expected to be announced in ten days’ time. 

Put together by Natalie Ceeney, chair of a group set up by banking lobby group UK Finance to find solutions that will keep cash on the high street, it is likely to pave the way for the rollout of shared branches or banking hubs. 

These are branches where the running costs are shared by the major banks with basic banking services provided by a third party such as the Post Office. 

Cash in hand: Shared branches or banking hubs are branches where the running costs are shared by the major banks with basic services provided by a third party such as the Post Office

The Mail on Sunday has long called for a network of such branches to be set up as part of its Keep Our Cash Campaign – allowing customers of all banks (including small business accountholders) to do their banking in one place on the high street and meet with their own bank’s representatives on specific days. 

Although details of the report are being kept under tight wraps – Ceeney wouldn’t be drawn on the issue last week when pressed by The Mail on Sunday – it is understood that banking hubs piloted in recent months in both Scotland (Cambuslang, near Glasgow) and England (Rochford, Essex) have proved great successes, revitalising both communities. 

As a result, new hubs are now planned for the New Year although it is understood that their exact number and location are still being argued over. As foreshadowed by the MoS in October, it is also expected that Ceeney will confirm that cash machine network Link will play a key role in ensuring communities are protected from losing access to cash. The banks will be required to give Link notice of their intention to shut specific branches and free-to-use ATMs. 

Link will then assess case by case whether any closure will compromise a community’s access to cash. If it does, it will have the right to order the setting-up of a banking hub. Such a situation is likely to arise where a bank’s branch closure leaves a community bankless. In such a circumstance, Link could insist on the hub being set up in the closing branch. 

Last week, Link also confirmed that by the end of the year, 2,000 shops nationwide will be offering cashback to customers without the need for them to make a purchase. 

This follows the introduction of supporting legislation by the Government. Ceeney sees such cashback services as crucial to guaranteeing nationwide access to cash – and believes they are particularly invaluable in low-income areas (where many people can only afford to take out small amounts of cash) and isolated communities, where a free-to-use cash machine cannot be justified on commercial grounds. 

The services are also good for the small businesses that provide them because it reduces their need to bank cash takings on a regular basis – a task made increasingly difficult by the closure of bank branches. 

Ceeney’s deal with the banks will not halt the rash of branch closures – another 70 were announced by Spanish-owned TSB last week, taking the total number of branches it has closed over the past four years to 330. By next June, its branch numbers will be down to 220. Indeed, Ceeney’s report could persuade other banks to bring forward closure programmes. Already this year, some 800 bank branches have been culled. 

Derek French, a former executive of NatWest, has long campaigned for the shared bank branch format now being trumpeted by Ceeney. 

But the former head of the now defunct Campaign for Community Banking Services fears that any deal that Ceeney has struck with the banks on banking hubs will fall far short of what is required. 

He told The Mail on Sunday: ‘I am preparing myself to be disappointed as there are 150 locations in urgent need of a banking hub. 

‘A handful of new hubs will not address the problem. And if branch closures continue at the pace they are currently running at, we will need 400 hubs by 2026.’ 

French is also sceptical that, without supporting legislation, Link could struggle to force banks to agree to all the banking hubs it recommends. 

The Government says it is ‘progressing legislative proposals to protect cash for the long term’. 

While Ceeney would not comment on her impending report, she did tell the MoS: ‘Recent branch closures are not a surprise given the commercial pressures facing high street banks. However, face-to-face banking services are really important for millions. The hubs in Cambuslang and Rochford have proved popular and indicate that such hubs may provide a solution.

This post first appeared on Dailymail.co.uk