Scottish Affairs Committee
Wednesday 8th July 2026
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09:30
09:30
Speaker 2
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Speaker 2
So all of those decisions are taken individually as strategic approaches to respective customer bases. Nationwide, as we've seen, is committed to a larger network, a larger estate. Whereas 1 or 2 others have committed to a somewhat smaller estate, but nonetheless feel that it's the right size for them and their customer base, and that will be based on their own research.
09:30
09:30
Speaker 3
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Speaker 3
Um, thank you very much. I notice in your description of your background that one of the areas that you're responsible for is vulnerable banking customers. Yes. Okay. So I am the MP for Skye in Wester Ross. And to describe my area is a bank desert would be an understatement. So if you live in Gairloch, which is a reasonably substantial community, which is on the west coast of Scotland, your nearest bank is Inverness, on the east coast of Scotland.
So two hours each way if you have a car and if you public transport a whole. Now Bank of Scotland closed their bank last year in Gairloch to enormous public upset. Um, do you think so?RBS and Lloyds. Lloyds obviously being the Bank of Scotland plus a lot make. Um £14 billion between the two of them. Profit. Do you think there should be some sort of moral obligation on these banks to cover the most vulnerable people in rural Scotland?I certainly agree that.
So two hours each way if you have a car and if you public transport a whole. Now Bank of Scotland closed their bank last year in Gairloch to enormous public upset. Um, do you think so?RBS and Lloyds. Lloyds obviously being the Bank of Scotland plus a lot make. Um £14 billion between the two of them. Profit. Do you think there should be some sort of moral obligation on these banks to cover the most vulnerable people in rural Scotland?I certainly agree that.
09:32
Speaker 2
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Speaker 2
All banks would want to serve their customers, and all will invest heavily in the way that they treat vulnerable customers. But it does come back to my entry point, which is actually even across vulnerable communities in branch. Banking isn't necessarily the solution that that works for that customer base. We see fewer than 2% of the population now exclusively use bank branches, so 98% will be looking to that multi-channel approach. And I think the specific point on vulnerability is something that is addressed through the regulator, Financial Conduct Authority, and it provides guidance that the banks will all subscribe to.
09:32
09:32
Speaker 2
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Speaker 2
I think it's I would offer a slightly different perspective, which is I think it's based on the economic activity rather than necessarily straight commerciality. I think it's very difficult actually to extrapolate individual profitability per branch, but nonetheless, I do come back to the point that actually the vast majority of customers aren't dependent on face to face banking services. And actually, when you think of protected characteristics, telephony can be a better solution. For example, for those with mobility issues.
09:33
Speaker 3
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Speaker 3
We have a 71% growth in population of people over the age of 75 in remote Scotland. They are the people who are most likely to want to use a retail bank. And secondly, the businesses are micro-businesses. And so again, they are the sort of organisation that requires cash. So the, the impact of these banks closing, I would say is catastrophic to those communities.
09:33
Speaker 2
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Speaker 2
So there's always the option for an assessment of a location to see if a different solution needs to be provided. So in the example you gave where there's been a branch closure, the the bank itself is responsible for undertaking its own assessment. Um, as and when it closes a bank branch. That link will in a later session, perhaps expand a little on the work that they do to ensure that there's sufficient coverage. So it's paying money in and taking money out.
Is. And then our colleagues at Link will, in a later session, perhaps expand a little on the work that they do to ensure that there's sufficient coverage. Poverty is cash related, so it's paying money in and taking money out. And I think we'll see increasingly alternative solutions on the high street that will augment is a bank branch. And then our colleagues at link will, in a later session, perhaps expand a little on the work that they do to ensure that there's sufficient coverage.
And when we then turn to specific branches, 75% of that activity, three quarters of that activity is cash related. So it's paying money in and taking money out. And I think we'll see increasingly alternative solutions on the high street that will augment branches, banking hubs, post offices, and increasingly, I think we'll see the roll of pay point solutions, which actually puts that ability to bank into local retailers. Therefore, it keeps the economic activity that's cash based circulating within that local community.
Is. And then our colleagues at Link will, in a later session, perhaps expand a little on the work that they do to ensure that there's sufficient coverage. Poverty is cash related, so it's paying money in and taking money out. And I think we'll see increasingly alternative solutions on the high street that will augment is a bank branch. And then our colleagues at link will, in a later session, perhaps expand a little on the work that they do to ensure that there's sufficient coverage.
And when we then turn to specific branches, 75% of that activity, three quarters of that activity is cash related. So it's paying money in and taking money out. And I think we'll see increasingly alternative solutions on the high street that will augment branches, banking hubs, post offices, and increasingly, I think we'll see the roll of pay point solutions, which actually puts that ability to bank into local retailers. Therefore, it keeps the economic activity that's cash based circulating within that local community.
09:34
09:35
Speaker 2
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Speaker 2
And that's entirely based on the objective assessment that takes you to sort of 99 or 97% coverage for access to cash. And then there's a sort of hierarchy of solution, which ultimately would be a banking hub, but might take you through post office to other aspects such as the ATM network. For example.
09:35
09:35
Speaker 1
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Speaker 1
IRA. Of course, Mr.. Lenders, large parts of the of of cities to that have absolutely no access to banks. But you quoted a figure there of 98% of the people as I understood it, not relying solely on a bank branch to do whatever transactions they need to make. But how much of that is from necessity?Because there isn't one alternative?Or is that a calculation that has been done to measure going forward how this will work?
09:36
Speaker 2
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Speaker 2
So I think it's important to get the sequencing correct. So it's this data that informs the activity. In branches. So we see much less activity in branches which is why they're closing. And we know that it's fewer than 2% of the population that actually rely exclusively on a bank branch. Then it's about 5% that sometimes use a bank branch. The vast majority of transactions, routine transactions are done online or through mobile banking. For example.
Mobile banking has come from a standing start to about two thirds of population coverage in about ten years. When we look at cash, the point that I think you were particularly interested in for your local community, the use of cash as payment dropped 25% year on year from 12% of payments to 9% of payments just last year. And we think based on our analysis, which does look forward to chair that actually, we'll probably in the course of the next 7 or 8 years, see cash usage flatten out at about 5% of overall transactions.
So 95% of transactions will be online, will be digital.
Mobile banking has come from a standing start to about two thirds of population coverage in about ten years. When we look at cash, the point that I think you were particularly interested in for your local community, the use of cash as payment dropped 25% year on year from 12% of payments to 9% of payments just last year. And we think based on our analysis, which does look forward to chair that actually, we'll probably in the course of the next 7 or 8 years, see cash usage flatten out at about 5% of overall transactions.
So 95% of transactions will be online, will be digital.
09:37
09:37
Speaker 2
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Speaker 2
So absolutely, this is where you come back to the solutions that are offered through the link assessment process that gives you that persistent access to cash. I think we need to distinguish access to banking services. And as I say, the way that consumers use banking or utilize banking services these days is just wholly different to where it was 20 years ago. What we're seeing is that banking estates, bank branch estates, are reflective of that change in pattern of use, which not exclusively in banking.
You see it in retailing as well, and therefore they are sizing for the demand across their customer base. I think it would be wrong to, to, to sequence that the other way round. It's not a consequence of branches closing necessarily that that activity is is shifting. It's simply the convenience of being able to, to bank online or using mobile solutions.
You see it in retailing as well, and therefore they are sizing for the demand across their customer base. I think it would be wrong to, to, to sequence that the other way round. It's not a consequence of branches closing necessarily that that activity is is shifting. It's simply the convenience of being able to, to bank online or using mobile solutions.
09:38
09:38
Speaker 4
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Speaker 4
Thank you. You, um, so if we're talking about vulnerable, vulnerable customers, um, and I agree with the chair that it's not just in rural areas where there are bank deserts. And certainly in my constituency, which is very residential, we have a large elderly population and our high street businesses are very much focused on social activities, bringing people together, reducing social isolation. Um, but there is another layer to the vulnerability of customers. When banks are removed. And that is that some of them will rely on family support or friends to help them to access their online banking.
And that in itself, you know, removes their independence. It removes their privacy and it can have detrimental effects on their self-esteem. So it's really important that they are able to stay independent as long as possible. And that includes being able to go to local businesses on their high street. And very often, certainly in my constituency, we've had an assessment where there is adequate access to to cash and and therefore, you know, the hub's not, uh, not being prioritised. Um, but there is a bigger picture going on here and how I'm interested to hear how you look at that area of vulnerability and not just the statistics that show that people aren't using the banks.
And of course, if they can't, they won't. So so there's, there's that clarity I think that's needed there.
And that in itself, you know, removes their independence. It removes their privacy and it can have detrimental effects on their self-esteem. So it's really important that they are able to stay independent as long as possible. And that includes being able to go to local businesses on their high street. And very often, certainly in my constituency, we've had an assessment where there is adequate access to to cash and and therefore, you know, the hub's not, uh, not being prioritised. Um, but there is a bigger picture going on here and how I'm interested to hear how you look at that area of vulnerability and not just the statistics that show that people aren't using the banks.
And of course, if they can't, they won't. So so there's, there's that clarity I think that's needed there.
09:40
Speaker 2
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Speaker 2
I think you make a very valid point, actually. And I think that, um, where banking can move in future is to provide assisted support and that assisted support may be friends, family may be ways to help those less confident, um, to, to continue to bank more independently. Of course, there'd be a metaphorical sort of view from over the shoulder, but that does preserve a degree of independence, which candidly wasn't there when I was a bank manager.
09:40
09:40
Speaker 5
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Speaker 5
Thank you, chair. Really brief one. Um, statistics are used like 98% of people aren't reliant on it or cash isn't used by the vast majority is all well and good when you look at the UK as a whole. But when you look at individual rural communities, when you look at certain regions in Scotland, those percentages will be significantly reduced. And I think that's very clear and and well known. So what work has actually been done to model a more regional basis?What the cash use and bank use is.
09:41
Speaker 2
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Speaker 2
So we've looked at that. Um, and actually, uh, in branches per head of the population, actually Scotland, Northern Ireland, Overindexes the rest of the UK average. Um, I think the point that was made earlier holds that actually there will be those more dispersed rural communities where, um, there perhaps isn't sufficient activity for a alternative. Solution like a hub when a branch closes, but that would be no different, perhaps in Wales or other parts of the country that demand and economic activity which will trigger the assessment to, to deliver a banking hub.
09:41
Speaker 5
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Speaker 5
And to do that assessment for businesses as well as individuals. Because obviously in particularly in rural Scotland or areas which are want, say, one step removed from from a high street, they still come into the high streets to use banking services. I mean, SMEs, really small home businesses are very common in rural areas. And the impact on them is huge because they need impersonal banking. You can't you can't do a lot of what they need to do in a post office.
So what, what assessments actually been done on the business impact, not just the individual personal banking?
So what, what assessments actually been done on the business impact, not just the individual personal banking?
09:42
09:42
Speaker 5
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Speaker 5
I'm not talking about banking hubs. I'm talking about from a bank's point of view. And the figures that you were talking about earlier, about how such a high percentage are using them, and therefore it's effectively, if I'm honest, it sounds like don't worry about it. It's fine. It's not fine for a lot of the country who are who are impacting this. And you're picking this up from this room in some parts of this country. This is a really big issue.
And those are the areas which are more remote, more removed from high streets. You do not have a quick trip into the city to get it done. What assessment in those areas or the proportion of, of people or businesses in those areas do not have access to banks.
And those are the areas which are more remote, more removed from high streets. You do not have a quick trip into the city to get it done. What assessment in those areas or the proportion of, of people or businesses in those areas do not have access to banks.
09:43
Speaker 2
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Speaker 2
So that's regulated by the Financial Conduct Authority. If a branch is to close, an assessment will be made of both personal customer base, the business customer base, degrees of vulnerability. Some of the geographic considerations so topographic topographically as the crow flies a distance might be um might might be somewhat shorter than if one had to take the, the mapped road or what have you. All of that is taken into consideration with respect. It does come back to this point that the way that we bank, including small businesses, has very much changed, and it is reflective of the convenience of digital solutions.
09:44
09:44
09:44
09:44
Speaker 6
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Speaker 6
Thank you chair. You know, I hear you talking about only 2% of the population use banks. And, you know, I must admit I'm guilty. I used all my banking on the phone, but is there any work done on the demographics of that 2%?You know, I'm thinking, for example, my my mum and dad, you know, they get a cheque and you can pay it in using an app, but they wouldn't have a clue how to do that. So, and I feel that we're impacting our elderly communities more, much more than, than everyone else.
So is that work done to understand that 2%, you know, who are they?
So is that work done to understand that 2%, you know, who are they?
09:45
Speaker 2
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Speaker 2
Yeah. So absolutely. And it's typically it's quite intuitive actually. So it would be older customers. It's also to a degree, somewhat younger customers who are less confident in their banking. But as they become more confident, they quite quickly migrate. There are some digital natives in younger age groups that move straight into digital solutions. And you see that in the popularity of what we consider neo banks such as Monzo, Starling, etc.. In the context of what is actually done in bank branches, as I say, three quarters is paying in money, taking out money.
And it's probably a small business point. It's also cash exchanged float for the till. The rest is administrative. What you would do on your phone. So checking balances, perhaps an admin changing the address. There is a minority of activity where um, it is I think, important that we consider how to, to, to support customers empathetically. That would be for example, bereavement. It might be um with power of attorney to support um a consumers that are that little bit more, more vulnerable, less able to operate independently.
And that's something we're, we're actively looking at.
And it's probably a small business point. It's also cash exchanged float for the till. The rest is administrative. What you would do on your phone. So checking balances, perhaps an admin changing the address. There is a minority of activity where um, it is I think, important that we consider how to, to, to support customers empathetically. That would be for example, bereavement. It might be um with power of attorney to support um a consumers that are that little bit more, more vulnerable, less able to operate independently.
And that's something we're, we're actively looking at.
09:47
09:47
Speaker 2
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Speaker 2
It does, but not materially, actually. So there is quite a degree of digital. Across older age, it would be a misnomer to think that there was a. Specific cohort that has been left behind as society digitizes, and we can cut that by um. Age. We can cut it by socio economic group by by income level. Um, typically those on lower incomes are more reliant on cash, therefore more likely to want to use post office, branch hub, etc.
ATMs as solutions. But that again, um, isn't. There. Well, it's a statistically valid, but not a disproportionately material number. I would.
ATMs as solutions. But that again, um, isn't. There. Well, it's a statistically valid, but not a disproportionately material number. I would.
09:48
09:48
09:48
09:48
09:48
Speaker 7
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Speaker 7
Thanks, chair. Mr. lenders, you talked about an objective analysis about access to cash. I'm sure it is objective in its sense, but it's also very, very binary. It's a very binary assessment of access to cash. And are you aware that there is no assessment on access to banking, only on access to cash, and that if you are lucky enough to get a banking hub, that is to satisfy an access to cash issue, not an access to banking issue, is that your understanding of the regulation that the FCA and link work to?
09:49
09:49
Speaker 7
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Speaker 7
Sorry, sorry. We'll get on to Hobson. I don't want to interrupt, but I know that we are running out of time a lot of time in the last question. So in Pitlochry they're not getting a hub and the Bank of Scotland has just shut up. So that means there's now no bank between RBS and Inverness and RBS in Perth. That's 111 miles across. Some fairly challenging Scottish topography. Just for context, maybe for you, the M25 is 117 miles long, so imagine.
I see also that Lloyds have shut in Putney, Putney Bridge branch. They shut in Putney High Street. Imagine if people in Putney High Street had to travel 111 miles to get to the next bank. That's what's happening in Scotland.
I see also that Lloyds have shut in Putney, Putney Bridge branch. They shut in Putney High Street. Imagine if people in Putney High Street had to travel 111 miles to get to the next bank. That's what's happening in Scotland.
09:50
09:50
Speaker 7
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Speaker 7
I hear you. And every time a branch shuts in my constituency, I get that data from the bank as well. That shows who's using physical banking and what they're using it for, and who's on the telephone and who's on digital. I get all that. But the people and you didn't answer it very well in the last question, if I could. Mr. Leenders, is you say that older people mustn't be dismissed as not being digitally literate. And of course, there are digitally literate older people, but there are many who aren't and will never be digitally literate.
And over and above that, they have a very particular attitude towards money and personal finance that will not be satisfied. From a post office counter, which may or may not be open and is almost certainly in a very different retail environment to a bank. And that is very challenging for people, is it not?Older people?
And over and above that, they have a very particular attitude towards money and personal finance that will not be satisfied. From a post office counter, which may or may not be open and is almost certainly in a very different retail environment to a bank. And that is very challenging for people, is it not?Older people?
09:51
Speaker 2
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Speaker 2
Well, I. Think that takes me to my earlier point about how we would like to support with dual control, with third party access, that will allow those that consumer base, which may be older, maybe less confident, maybe more vulnerable in other ways. I think that makes a lot of sense. And I think we do need to to look at that. Um, I would offer a slightly different perspective if we felt that the singular solution was to sustain bank branches, because I'm not convinced that that ultimately is the best solution for those consumers.
09:52
Speaker 7
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Speaker 7
So accepting that on its merits, I might disagree. I might not, but therefore, do you not accept that the threshold, nebulous as it is about whether or not you get a banking hub entirely in the gift of link, subject to what the FCA tell them to do, and subject, I suspect, behind closed doors about what the banks want them to do. Whether or not you get a banking hub is it's it's a lottery. It's an absolute lottery.
09:52
Speaker 2
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Speaker 2
I'd have to contest the point because actually, you know, the, the. The regulator, the FCA, consulted carefully on the requirements around distribution of cash solutions. I would make the point that actually in banking hubs, there is more than just cash available. And there is provision for banking services as well. On a voluntary basis.
09:53
Speaker 7
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Speaker 7
I have the respect for banking hub in Brecon. It's been a transformative. The problem is, is when areas like Pitlochry and the vast hinterland that Pitlochry serves has their last bank closed and they are told by link that they don't meet the criteria. Opaque as that is for a banking hub, that that that is the problem because we are talking about high streets and people coming to the high streets. They're not going to they're not going to come to the high streets to access a banking hub if there isn't a banking hub there.
And this comes down to cost. We all know that the banks fund the banking hubs, and they obviously want to fund as few of them as possible. And I wonder what you think, because these are all your members, Mr. Leenders. All of these people affected by branch closures stood behind the banks in 2008, with £137 billion of taxpayers money. Where we are, and we were no sooner out of the financial crisis when this process of bank closures started. And it's coming to its culmination.
Do you think that is a reasonable way to treat the very consumers who protected your members from going to the wall?
And this comes down to cost. We all know that the banks fund the banking hubs, and they obviously want to fund as few of them as possible. And I wonder what you think, because these are all your members, Mr. Leenders. All of these people affected by branch closures stood behind the banks in 2008, with £137 billion of taxpayers money. Where we are, and we were no sooner out of the financial crisis when this process of bank closures started. And it's coming to its culmination.
Do you think that is a reasonable way to treat the very consumers who protected your members from going to the wall?
09:54
09:54
09:54
Speaker 2
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Speaker 2
Well, I was thinking of the cause that sits sits behind the the fact with respect, I think. That as links are giving evidence a little later, they'll be able to expand on the criteria. I think the point that I made earlier was that there's an entirely independent assessment, and I think the assertion that there's a degree of collusion with the banking sector behind the scenes is something that I would have to reject.
09:55
09:55
Speaker 2
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Speaker 2
So if I was to reflect that in the level of customer satisfaction that we see in banking, that's actually increasing. And, you know, you can look at independent studies that will show, um, some of the highest levels of satisfaction in banking that we have seen. And that would predate the global financial crisis. And I think that's reflective of the fact that the investment is following the demand, and it's where it's being made in. Dancing technologies, where actually we see customers want to do their banking.
So, yes, I think that the the industry is responsive to consumers. What I think you're suggesting is that we should in some way preserve a historic, um, form of banking that regrettably, we just don't see reflected in customer behaviour.
So, yes, I think that the the industry is responsive to consumers. What I think you're suggesting is that we should in some way preserve a historic, um, form of banking that regrettably, we just don't see reflected in customer behaviour.
09:55
Speaker 7
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Speaker 7
I can see why you've come to that conclusion, but let me reassure you, I'm not wanting banks preserved on the high street as mausoleums to a way that we used to live. That's not that's not what I'm asking. I'm asking and I'm not going to ask it again because I've asked it twice. But my point is, is that it shows a level of, I would say, ingratitude towards these banks are only here because the consumers up and down these islands protected them through taxpayer cash.
And immediately that was over, the banks started closing. And that would not be that would be much less of a challenge if there was a much more proactive and well funded regime where banking hubs popped up, where banking deserts were created. And that's not where we are. Certainly not in Pitlochry. One final thing from me very briefly, chair. Um. Do your members take any cognisance of the appropriateness or otherwise of the environments that the Post office is located in?Because of course, there are very few actual post offices.
Now, post offices are co-located with other retail and and other. Businesses. Is there any criteria that your members like to see before they shut up shop?
And immediately that was over, the banks started closing. And that would not be that would be much less of a challenge if there was a much more proactive and well funded regime where banking hubs popped up, where banking deserts were created. And that's not where we are. Certainly not in Pitlochry. One final thing from me very briefly, chair. Um. Do your members take any cognisance of the appropriateness or otherwise of the environments that the Post office is located in?Because of course, there are very few actual post offices.
Now, post offices are co-located with other retail and and other. Businesses. Is there any criteria that your members like to see before they shut up shop?
09:57
Speaker 2
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Speaker 2
So across the post office estate and again, colleagues will be able to expand on the detail. Um, there is a level of service provision that's agreed across all of the banking sector. I think some 33 personal bank account providers in about 15 or so business current account providers. Um, and that's a consistent level of, of service around paying in and withdrawing cash. And there are some limited, um, administrative solutions as well, such as balance, etc.. And it's something we've worked on with the post office for probably a decade or so now under what we call the banking framework.
And I think the post office would say, as we would, that it's very well received.
And I think the post office would say, as we would, that it's very well received.
09:58
09:58
Speaker 5
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Speaker 5
Oh, sorry. Three thank you. One quick question before I move on to this. I've been listening carefully to what you've been saying throughout, including things such as a historic form of banking and whether or not we want to sustain bank branches. Do you and your members actually believe in high street banking?
09:58
09:58
09:58
Speaker 2
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Speaker 2
Um, I'll come back to the point I was about right. I've run branches, so I've seen both sides of the debate and I can empathise with a lot of the more emotive considerations that this committee is giving to the point. Equally, though, banks compete against each other in an environment where technology is moving very quickly and there are some in that market that don't offer banking by branches as a solution. So that's an additional cost that they need to compete with. Um, so yes, there are commercial and economic considerations.
I don't think anyone would would deny that. But equally I think the view that banks are dismissive of the, um, those customers that prefer to bank in branch is just, um, I just don't recognise.
I don't think anyone would would deny that. But equally I think the view that banks are dismissive of the, um, those customers that prefer to bank in branch is just, um, I just don't recognise.
09:59
Speaker 5
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Speaker 5
Okay. Um, the, the government has their access to banking review live at the moment, um which may or may not, but may um mandate for more in-person services or protecting of um, what would that look like for the banking sector if that is, is um the conclusion of the review and how would that be implemented?
09:59
Speaker 2
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Speaker 2
So I think the services that are provided in branches, in hubs, etc., um, historically and to date are broadly very much the same, the vast majority, as I say, three quarters is about cash transactions. Then you have a series of more administrative issues such as, um balance, um, understanding your balance, recent transactions, there's probably about 10% is transfers, making transfers between accounts to other people. And then, um, on those unfortunate occasions that we all face a handful of times in our life, there will be need for support to deal with a bereavement, for example, or a power of attorney, but that would be, you know, low single digits of, of actual activity.
I would expect that that will be reflected in the findings of the independent review, because that just hasn't changed over time. And I would expect that the, the. Central premise will be the extent to which a much more hybrid approach to banking and banking services will, um, will. Serve communities into the future.
I would expect that that will be reflected in the findings of the independent review, because that just hasn't changed over time. And I would expect that the, the. Central premise will be the extent to which a much more hybrid approach to banking and banking services will, um, will. Serve communities into the future.
10:00
10:00
10:00
Speaker 5
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Speaker 5
You can't do bereavement support over over a phone. You can't do some of these other services online. You need to have a bank branch. As I've heard earlier, there's areas in Scotland where you have to travel over 100 miles to get to a bank branch. So if if the review comes back and say in-person services need to be protected or enhanced, would would more branches be opened?Like how is that going to be delivered?I understand the services, but how would it be delivered.
10:01
Speaker 2
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Speaker 2
With respect?Those services typically include referrals to specialist units. So it is not as if there is an individual in a branch, nor has there been for some time that would specialise in particularly, say, bereavement or, uh, mandate issues. Such as a power of attorney that would largely be centralised, which comes back to this pattern of banking, where consumers might want to have that initial. Conversation to understand. They might want to might have done some research on the internet and might want some clarification.
But a very comfortable in moving into a telephone. Um, or um. Teams video based environment periodically perhaps taking information, um, digitally in other circumstances. That whole nature of walking into a bank branch as perhaps 30 years ago when I was in the networks that has just, it's, it's no longer there. It's just not how people operate.
But a very comfortable in moving into a telephone. Um, or um. Teams video based environment periodically perhaps taking information, um, digitally in other circumstances. That whole nature of walking into a bank branch as perhaps 30 years ago when I was in the networks that has just, it's, it's no longer there. It's just not how people operate.
10:02
10:02
10:02
10:03
Speaker 5
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Speaker 5
Medium term, I mean, that could be three years. I mean, you get a business. I mean, you'll understand this. I mean, I think we can all understand this. A business needs more than a three year horizon for planning. Three years isn't really protecting. It's giving someone a bit of breathing space. It's not protecting a three year commitment is not is not enough for a business.
10:03
Speaker 2
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Speaker 2
I would beg to. Differ because I think that the way that um, society and the speed with which society is adopting technology and digitisation needs to be reflected and balanced in those commitments. You know, we've talked about access, and I think the point was made earlier about, um, a lack of broadband or internet access infrastructure simply isn't there in some of those areas that, uh, that you represent. But that's changing very, very fast.
10:04
10:04
10:04
10:04
Speaker 2
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Speaker 2
With respect. It probably won't based on the existing distribution model. But as we see the innovations that I refer to, such as Starlink coming into the market, you know, we will be familiar with internet access on aeroplanes, for example. It's a different type of distribution that will start to come through. And that's why we do need to think forward a little more. And when we consider making those commitments, we need to be flexible enough to move with the technologies and the way that society adopts them.
10:05
10:05
Speaker 1
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Speaker 1
I think it might just be worth saying at this point that the committee has actually been doing another inquiry into digital connectivity, particularly in remote and rural areas in Scotland. And, um, our inquiry would bear out Miss Cross's point very, very strongly. And Starlink is not an alternative to broadband for many people because geographically it doesn't work everywhere and it's very expensive. So for those people who are trying to access banking, uh, it might be a more alternative way that they have to use to be able to do their banking.
Um, so it is something the committee is actually very, very concerned about, but I'll pass on now to Maureen Burke. Thank you chair. Excuse me.
Um, so it is something the committee is actually very, very concerned about, but I'll pass on now to Maureen Burke. Thank you chair. Excuse me.
10:05
Speaker 9
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Speaker 9
Probably what I'm going to ask yourself is, um. Been spoken about, but it's something that I want to put forward to you. In addition to the bank closures, the number of free to use cash machines in Scotland has fallen by a quarter since 2018. So can you tell me what the industry is doing to ensure that people can continue to access cash and. The communities where there is. Where the community is still in demand, but is there enough demand there to give the communities that are not getting the service the proper service?Um, can you tell me what your what your plan is for that.
10:06
Speaker 2
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Speaker 2
If I may, I'll perhaps defer, um, or perhaps point that ask you to point that question towards my colleagues at link as they administer the ATM network. I think it will come back around to that point of demand and the extent to which cash is used each week. I see the aggregate cash in and out of wholesale cash centres, and year on year it is reducing. And then we would think of that translated into payments. As I've mentioned before, this significant drop.
And we'll see that. I think that trend continuing to a floor, we would think of about 5% of transactions. And there are big benefits in using digital payments. You have far more protections. And as we see again, the, modernisation of the payments regime. The function of a payment will become far wider than simply moving money from A to B. You'll be able to include data and information alongside that payment. So payments are only going to be more supportive of society going forward.
Whereas cash obviously it's essential as a fallback. I don't think anyone would deny that. It will, I think, always have a place in society. We know that, as we've articulated earlier in this conversation, that there are certain groups of consumers, lower socio economic groups, lower income groups, perhaps older, age, perhaps younger, that will always want to use cash. But again, that network estate is is based off a demand footprint.
And we'll see that. I think that trend continuing to a floor, we would think of about 5% of transactions. And there are big benefits in using digital payments. You have far more protections. And as we see again, the, modernisation of the payments regime. The function of a payment will become far wider than simply moving money from A to B. You'll be able to include data and information alongside that payment. So payments are only going to be more supportive of society going forward.
Whereas cash obviously it's essential as a fallback. I don't think anyone would deny that. It will, I think, always have a place in society. We know that, as we've articulated earlier in this conversation, that there are certain groups of consumers, lower socio economic groups, lower income groups, perhaps older, age, perhaps younger, that will always want to use cash. But again, that network estate is is based off a demand footprint.
10:08
10:08
Speaker 2
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Speaker 2
So the industry supports and funds the entire cash regime as a payment scheme. So end to end, it buys the notes from the Bank of England, it buys coinage from the Royal Mint, it distributes that through cash centres, cash in transit and delivers it to point of sale. So I think the industry makes a material commitment to sustain access to cash. I hear the particular point about ATMs as a component of that. That I think is something that we think would be far better placed to answer for you.
10:09
10:09
10:09
10:09
10:09
10:10
10:10
10:10
Speaker 2
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Speaker 2
Yes. We have seen that that has fallen away again. Um, so what we've seen is we saw, we've seen a fairly steady trajectory in the reduction of the use of cash that accelerated through the pandemic by some measure. Then we saw a degree of correction. So there was a slower decline. Um, but we're now sort of reverted to to the mean. And we're seeing that, um, we're seeing that continued decline in use of cash last, our last set of data didn't reflect your point, but the set before, which would have, would have been 2024, we did see a migration to cash, which we understood to be a use of cash as a budgeting tool.
Now, to counterbalance that, we also see that consumers like a mobile app, because that gives them real time data on how much money they have in their account. And then there's a degree of preference between whether you want to physically feel that cash, or whether you're comforted by the fact that it's in your bank account.
Now, to counterbalance that, we also see that consumers like a mobile app, because that gives them real time data on how much money they have in their account. And then there's a degree of preference between whether you want to physically feel that cash, or whether you're comforted by the fact that it's in your bank account.
10:11
10:11
10:12
10:12
10:12
10:12
10:13
Speaker 10
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Speaker 10
Chair, my constituency of West Dunbartonshire is no different from everybody else's constituency. I would suspect, for instance, the Bank of Scotland and Alexandria Main Street in West Dunbartonshire caused earlier this year. But we are very fortunate in that we do have a new banking hub in Alexandria, Main Street, and I would agree with you. It's been very well received. It's open Monday to Friday. It's extremely busy and it provides both personal banking and business finance and obviously a post office as well.
So I do regard that as a major boost for local businesses on the main street.
So I do regard that as a major boost for local businesses on the main street.
10:13
Speaker 2
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Speaker 2
Groups, but I am more interested in the small businesses and local organizations. If high streets are to survive, I think it's about local businesses, unique local businesses and go local and buy local. I think they rely on high street banking to deposit cash almost on a daily basis, more than the national retailers do. So to what extent is. That a factor when the banks decide and are looking at whether or not to close a branch in a particular main street. Do you consult with the local businesses when reaching that decision in relation to the extent that they rely on that bank?
10:14
Speaker 3
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Speaker 3
So yes, there's extensive communication. As a brand determines to close its branch, I think you're right in your observation. I think that for larger franchises, the solutions for volume cash, the more secure solutions for volume cash, such as collection, delivery, etc., are predominant. So I think they are less relevant in the context of high street and and bank branches. Through the post office. Obviously, there's the ability to pay in and to withdraw and also to exchange cash for float.
I think it's change giving in their terminology. Um, there are other solutions that we think, as I mentioned earlier, will sustain that economic activity locally and through, for example, as I mentioned, Paypoint, the local retailer might be able to support the banking of cash in that community as much as the post office or a branch or a hub. And that, I think we would see as a solution to, to support those cash based small businesses in communities.
I think it's change giving in their terminology. Um, there are other solutions that we think, as I mentioned earlier, will sustain that economic activity locally and through, for example, as I mentioned, Paypoint, the local retailer might be able to support the banking of cash in that community as much as the post office or a branch or a hub. And that, I think we would see as a solution to, to support those cash based small businesses in communities.
10:15
10:15
Speaker 3
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Speaker 3
Again, colleagues from Cash Access UK are with you just a little later on. I think to 350 hubs by 2029. I think there's some 230 240 open already with some in the pipeline. There are some local complexities. Uh, when we were more directly involved at the inception of the Banking hub project, there were challenges in finding premises, um, on high. Streets. Um, there, um, there were preferences from landlords for um, different tenants and some of the premises were simply not suitable.
But the specific parameters of that I think would be something for cash access. UK to expand on. Thank you.
But the specific parameters of that I think would be something for cash access. UK to expand on. Thank you.
10:16
10:16
Speaker 5
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Speaker 5
Um thank you chair. I we spoke earlier specifically about vulnerable customers, but there are other groups of customers who are just less willing, um, are able to use digital services. And how are banks specifically preserving in-person services for these groups against the wider trends in technology and consumer behaviour?
10:16
Speaker 3
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Speaker 3
So. It comes back, I guess to um. The different options that consumers have. And I think we are in this conversation perhaps understating the role of telephony, for example, which is a technology that I think most would agree was pretty much ubiquitous and actually proves. Very helpful. And we discussed earlier, perhaps some protected characteristics, such as mobility, where telephony is a great solution. And of course, telephony as in um, the. The, the telephone of old again expands into more digital solutions such as um, video conferencing and, and face to face calls, etc., which, you know, will be familiar with through WhatsApp teams, Zoom, etc..
10:17
10:17
Speaker 3
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Speaker 3
Yeah. And we've done some very interesting work, actually, with an organisation called the Connection Project where um individuals that would otherwise have considered themselves to be um, much less digitally competent and confident when provided with infrastructure, with um the hardware, with the hypercare, um, training and solutions, the adoption levels are very high. So I think that there's a lot to be explored in supporting consumers bridge into that, that type of world.
10:17
10:17
10:18
Speaker 1
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Speaker 1
Kirsteen Sullivan Thank you, chair. Um, we've already spoken quite a bit about the challenges of connectivity, and it would appear that a lot of the mitigations around bank closures actually, they're really about shifting people towards online banking. Um, so would you agree that a lot of the mitigations are actually relying on good connectivity when. We've already identified that connectivity remains a challenging issue for large parts of the country.
10:18
Speaker 3
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Speaker 3
Well, it's clearly a component, but I think what we would look to first is what is the outcome that we want to provide for that individual consumer?What is the solution that they are looking for and how best and most efficiently could that be delivered?Um, so yes, there will be certain technologies that are reliant on, um, 4G, 5G, broadband. There are others less so. Um, so you come back to telephony etc. and that in itself can provide that landline, can provide that connectivity into, um, the solution that delivers the best outcome is.
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10:19
10:19
10:19
Speaker 1
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Speaker 1
And how do you respond to the suggestion that banks don't understand the scale of the challenges involved in accessing more distant branches in rural Scotland in terms of time, costs and transport reliability?And I will just come back also to that online connectivity. This committee has heard time and again from communities across the Highlands and Islands and elsewhere in the country of the rural penalty. Everything costs more and there are more barriers to accessing the services that they need. So the banks actually understand this.
10:19
Speaker 3
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Speaker 3
So. Um, I don't know that any bank would lightly dismiss a decision to close a branch. It's carefully considered and assessed. And you've seen some of the, um the process that goes through. It's a regulated procedure. Um the. The question of connectivity and the wider infrastructure provision that creates some of that premium, I think is something for the. The. Infrastructure providers to support you with. I'm not clear on their plans necessarily to, to broaden or extend coverage.
10:20
Speaker 1
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Speaker 1
If connectivity is taken into account when the decision is taken to. To close a branch. Equally, transport should be a very important factor because rural areas have significant difficulties in being able to travel as well. Because of the decline in a lot of local bus services. So I would argue that those factors need to be taken into consideration too, particularly when perhaps small businesses really rely on having that face to face contact. But as. My colleague Mr.
McDonald said earlier, they may have to travel extensively to do that. And not everyone has the means.
McDonald said earlier, they may have to travel extensively to do that. And not everyone has the means.
10:21
Speaker 3
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Speaker 3
Yes, and I think when um. Link undertake their visits to locations, for example, those are certainly factors that they would take into account. Consideration of whether an alternative um provision is, is warranted. Um equally for um, for banks. Clearly they will be empathetic to local circumstances. Those may um. May differ in rural areas to more urban areas. And that's part of the assessment that, that they would undertake.
10:22
10:22
10:22
10:22
10:22
Speaker 4
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Speaker 4
Thank you. Because I have seen much of the consultation from people in the area, and I don't think I found anybody saying it would be a good idea to close that bank. So as far as I can see, the consultation may be headed. We will make more profit if we close this branch. I can't think of any other rationale for closing it, but if you could share that with me, I would appreciate that.
10:23
10:23
10:23
10:23
Speaker 3
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Speaker 3
Would it takes you back to a. High street of a butcher, which was part of a local community, a baker, a pub, um. The pattern of high streets and the retail presence on high streets has fundamentally changed. And I think that the banking sector is no different in changing with that. So whereas perhaps many years ago, um, a high street branch or branches would have been um. Fairly evident on high streets given the way that um or the manner in which we, we shop these days, that's changed.
10:24
Speaker 11
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Speaker 11
So when. We learn of bank closures within the high streets. They feel that there's a real disconnect between the bank's decision and what community groups, volunteer groups, third sector local councils are all working together in a real effort to revive the local economy. And that may be put at risk simply by the banks withdrawing from the high streets, you know, so reduced footfall for businesses, a sense of communities being downgraded, um as well as the loss of those well-paid bank jobs and that spending power and an empty building that's left in their high street, which nobody can afford to take over.
Um, occupy, etc.. And it's just another blight on the high street. So my question is, when banks are considering closing a branch, what impact assessments are made in relation to the community and the high streets before closing that that branch.
Um, occupy, etc.. And it's just another blight on the high street. So my question is, when banks are considering closing a branch, what impact assessments are made in relation to the community and the high streets before closing that that branch.
10:25
Speaker 3
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Speaker 3
So there is extensive outreach to local communities as a decision to close a branch is taken. Um, and that's part of the regulated requirement on banks as they consider closing their branches. The. The central point, I think we keep coming back to and with apologies for being repetitive, is that the way that consumers are. Banking has fundamentally changed. And what we're trying to deliver for consumers is the outcome that they are after to the conveniences. Is your colleague has mentioned across a range of different channels, rather than to persist with a bank branch, which may not be for the majority of the community, the solution that they utilise at all.
10:25
10:25
Speaker 3
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Speaker 3
I believe that bank branches typically follow economic activity and don't necessarily lead it, but I would absolutely recognise that there are the original purpose for a bank branch was to garner deposits, was to take deposits from the local community. Um, and provide that reassuring presence on the high streets that your cash was saved in sort of the, the high walled architecture, etc.. Um, that. Um. Pattern of taking deposits has very much shifted. Do you still see it to an extent in the building society movement?I would argue we've got more straightforward savings and loans.
You don't necessarily have current account. Propositions but. I think it would be. Um a slightly false premise to consider that economic activity is driven by a local bank branch.
You don't necessarily have current account. Propositions but. I think it would be. Um a slightly false premise to consider that economic activity is driven by a local bank branch.
10:26
10:27
Speaker 3
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Speaker 3
Um your colleagues just left you. I think what we've seen is a series of restructures that has taken individual branch estates to sizes that they feel is representative of the support their customers want. And, you know, we may take issue as to the, um, duration of the commitments that have been made. But I think to your point, a number of brands have committed to sustaining networks at their current size for the medium term future. And that, I think, is reflective of how they feel they'll support their communities.
10:27
10:27
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10:28
Speaker 3
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Speaker 3
I can give you examples of where a decision has been changed off the back of consultation. And I think, you know, link will be able to give. Examples of appeals that have been upheld where a decision, for example, for a hub may not have been taken. I don't have that fact base with me just now, but happy to provide it to the committee.
10:29
Speaker 1
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Speaker 1
We'd be delighted to see that information. I know it was of great concern to my constituents when I was a councillor in Whitburn. Um when the last bank closed there. And I know colleagues will share those experiences when we have had the last banks close and people have been left without access to in-person banking services. And despite, um, huge consultation and several meetings, um, the decision was still final. So I would really be keen to see the information that, that you have on that where decisions have been changed.
Thank you.
Thank you.
10:29
10:30
Speaker 7
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Speaker 7
Yeah. No, but my chair, my my question was very similar. It was just, you know, we hear about consultation, but a lot of communities feel this is just a tick box exercise. So it was really just to get the information back about how often these decisions are actually changed. Um, we good to good to know.
10:30
10:30
10:31
10:31
Speaker 3
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Speaker 3
I think this is a competitive differential. So HSBC has made a commitment. NatWest has made a commitment. So as I say, a number of the major high street brands have committed to branch networks. Those are a few examples. And I think nationwide has has used that as a competitive differential and have emphasized that in in a lot of their marketing as well.
10:32
10:32
Speaker 10
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Speaker 10
Mr. Lenders. That brings us to the end of our questions this morning. So thank you very much for your time this morning and for participating in this session. We look forward to the further information that you're going to provide to us. But thank you very much. Order, order!Reconvene this session of the Scottish Affairs Committee. Good morning and welcome to our witnesses. I wonder if each of you may be starting with Mr.
Ashton. Could just say your names and what you do.
Ashton. Could just say your names and what you do.
10:33
10:33
Speaker 14
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Speaker 14
So Chris Ashton, chief commercial officer at link. Link is a public interest. Not for profit. Protects access for cash in Scotland and the UK. We run the UK's ATM network and also the coordination body that undertakes access to cash rule. Sorry access to cash assessment under the FCA. Access to cash rules that were introduced in September 2024 as part of a Financial Services and Markets Act.
10:34
10:34
Speaker 15
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Speaker 15
I'm Mr. Thomas, I'm the chief strategy officer at Cash Access UK. We're the delivery body. That is the next step in the process. After link makes an assessment around access to cash needs. So we are a not for profit organised by the majority of the high street banks. We take assessments from link. We then find appropriate properties, build and run banking hubs in communities where they're recommended.
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10:35
Speaker 10
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Speaker 10
As you will have heard from the earlier. Session, I think all members around the table have great concern about a number of issues in connection with banking and with cash. So can I ask all of you what progress your organisations are making in protecting access to cash and to banking, as well as bank branches continue to close?It seems to be something that we're all having to face on a weekly or monthly basis. So it would be really interesting to know what you're all doing to protect access to cash and banking.
I'll start with Mr. Ashton.
I'll start with Mr. Ashton.
10:35
Speaker 14
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Speaker 14
Yes, I've got two hats as far as this is concerned. Obviously the ATM network and also the assessments. If I start with the ATM network, if I can. So, um, cash usage is down 40% since 2019, but saying that £600 million per month is still taken out by Scottish ATMs. So a significant number, um, looking back over the last five years, um ATMs have reduced by 24% in Scotland. But actually, if you look at the percentage of population within one kilometre, that has remained static.
So in 2019, 90% of people in Scotland were within one kilometre of an ATM. In 2026, 89% are still within one kilometre of an ATM. A lot of that is done through our protected ATM scheme, so we have a guarantee that we will ensure that there's an ATM within within one kilometre of a community, and we protect 11% of ATMs in Scotland by paying enhanced premiums, even if they're not commercially viable, to ensure that people do have free access to cash. Happy to talk about that in a bit more detail later on.
The second part around the assessments. Um, since September 2024, under the regulated scheme, and actually for two years before that, under a voluntary scheme link, have done assessments wherever a bank branch closes in Scotland. Um and also if we get a community request from someone in a community, if that be an MP, MSP, councillor or someone who's just interested in that local community, we've undertaken. Um about 200, about 233 assessments to be precise as of this morning. Um following 200 closures.
And we've recommended 33 banking hubs so far in Scotland.
So in 2019, 90% of people in Scotland were within one kilometre of an ATM. In 2026, 89% are still within one kilometre of an ATM. A lot of that is done through our protected ATM scheme, so we have a guarantee that we will ensure that there's an ATM within within one kilometre of a community, and we protect 11% of ATMs in Scotland by paying enhanced premiums, even if they're not commercially viable, to ensure that people do have free access to cash. Happy to talk about that in a bit more detail later on.
The second part around the assessments. Um, since September 2024, under the regulated scheme, and actually for two years before that, under a voluntary scheme link, have done assessments wherever a bank branch closes in Scotland. Um and also if we get a community request from someone in a community, if that be an MP, MSP, councillor or someone who's just interested in that local community, we've undertaken. Um about 200, about 233 assessments to be precise as of this morning. Um following 200 closures.
And we've recommended 33 banking hubs so far in Scotland.
10:37
10:37
Speaker 15
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Speaker 15
And at cash access, our role is to then build and then operate the banking hubs that provide that access to cash and access to banking services for communities and individuals who need it. As Chris said, we've got 31 banking hubs open in Scotland already. There are two more in the works at the moment, as well as five cash hubs which provide specifically cash services in communities where that's deemed to be the need. Um, and what I would, what I would say is that while you're right, Mr.
Dugan, that the criteria focus on access to cash specifically in reality, those banking hubs have always been providing access to banking services on a voluntary basis as well. Those banking hubs have got counters running cash services operated by the post Office that customers can use any day of the week, but they also have community bankers on a rota basis from banks with a local market share so that customers can now walk into banking hubs and get help with banking needs advice. Some of the difficult life moments that Eric talks about.
And so those services are already on a voluntary basis, providing a lot of access to banking needs as well as cash.
Dugan, that the criteria focus on access to cash specifically in reality, those banking hubs have always been providing access to banking services on a voluntary basis as well. Those banking hubs have got counters running cash services operated by the post Office that customers can use any day of the week, but they also have community bankers on a rota basis from banks with a local market share so that customers can now walk into banking hubs and get help with banking needs advice. Some of the difficult life moments that Eric talks about.
And so those services are already on a voluntary basis, providing a lot of access to banking needs as well as cash.
10:38
Speaker 13
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Speaker 13
Um, so in terms of the access to cash versus access to banking, the sort of wider post office network very much falls into access to cash side of things. So we are now in the fourth iteration of the banking framework, which is extended out through to the end of 2030. So communities have that confidence that they can access cash, whether withdrawals or deposits, locally in their local post office. Um, at the same time, we're really proud of the role that we play in banking hubs as well.
So as Poppy alluded to, it's postmasters behind the counter in banking hubs. Um, so they obviously have a really key role in providing that access to cash. Um, more widely. We're very mindful of trying to make it really easy to get in and out of branches. So we're in the process of rolling out a lot of bank grade automation and technology in our branches, whether that's note counters, safes built into the counters, or what we call multi-function devices, which take both withdrawals and deposits.
Um, and then more widely, um, you know, we're very mindful that we need to make sure that post offices are sustainable and viable to run. So very much the north star of the business at the moment, I would say, is putting more money into postmasters pockets so that it's viable to run a branch, but also attractive to do so as well.
So as Poppy alluded to, it's postmasters behind the counter in banking hubs. Um, so they obviously have a really key role in providing that access to cash. Um, more widely. We're very mindful of trying to make it really easy to get in and out of branches. So we're in the process of rolling out a lot of bank grade automation and technology in our branches, whether that's note counters, safes built into the counters, or what we call multi-function devices, which take both withdrawals and deposits.
Um, and then more widely, um, you know, we're very mindful that we need to make sure that post offices are sustainable and viable to run. So very much the north star of the business at the moment, I would say, is putting more money into postmasters pockets so that it's viable to run a branch, but also attractive to do so as well.
10:39
10:39
Speaker 13
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Speaker 13
They provide the counter service. So when you go into banking they're essentially sort of two elements to it. There's the counter, um where you can do your cash withdrawals, cash deposits, deposit a check or sort of access your make, make a balance query, and that will be operated by a postmaster and their team. And then there's a community banking, um, sort of room, which maybe Poppy could speak to.
10:39
Speaker 10
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Speaker 10
So that's what the post office are doing. We've heard that the number of ATMs has gone down at a time when the number of bank branches has also gone down significantly. So how effective can the services that your organisations offer fill the gaps that are being left by the high street banks, particularly in those areas where we have a higher elderly demographic or they're more rural or perhaps even less, well, digitally connected?
10:39
Speaker 14
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Speaker 14
So. I'll start on that. So if I start with the ATM element of that, so as I said, there was 4800 ATMs in 2019. There's 3670. Um, in 2026. But the coverage as far as people being able to access those within a kilometre has stayed the same. And the reason for that is we've seen cash usage go down and where you may have had three ATMs on a high street, you've now got two. Um, because cash usage has gone down, but there's still access where there is no ATM on a high street.
Link has a responsibility under its protected ATM scheme to ensure there is one by paying extra premiums. So if I look at that, 99.2% of Scottish high streets have free access to cash provided either through a free to use ATM or the Post Office service, which I'm sure Jack will talk about later. So as far as protecting cash from that element, um, I can sit here confidently and say we have things in place to support, um, communities. As far as the assessment process. So we call that coordination body role.
So we're an independent body away from the banks who do assessments either when there's a bank closure or when we get a community request through. The assessment is built through rules to make sure it's consistent. We look at urban locations and rural locations slightly differently based on their catchment areas, but the rules that sit behind it are consistent. So we have four main vulnerabilities on there, some of which you've spoken about earlier on financial vulnerability. We know people, um, can use cash to budget.
That's one of the biggest reasons people use cash. Digital vulnerability that looks at both connectivity, but also things like education levels, because unfortunately, we know people maybe with lower educational levels, or if they've got a non-visible disability, need to use cash more than others. We look at age. Um, so percentage of people over 65 in a local community, because we understand again, that certainly elderly customers might have a preference or need to use cash. And the final thing is we look at proximity to next, um, provision.
So, so where do you have to travel to?We actually look at it in three ways cost to get their distance. As far as the crow flies. But more importantly, from some of the things I've heard about today, public transport times. And so that is built into the assessment process to make sure it's consistent. As I said, we've done 233 assessments and recommended 33 banking hubs so far in Scotland, and we will continue to do that every time we get a branch closure notified to us, or we see a non-designated cash solution close.
So if a post office closes, we do the same assessment in an ATM close as we do the same assessment, or if we get engagement from a local community.
Link has a responsibility under its protected ATM scheme to ensure there is one by paying extra premiums. So if I look at that, 99.2% of Scottish high streets have free access to cash provided either through a free to use ATM or the Post Office service, which I'm sure Jack will talk about later. So as far as protecting cash from that element, um, I can sit here confidently and say we have things in place to support, um, communities. As far as the assessment process. So we call that coordination body role.
So we're an independent body away from the banks who do assessments either when there's a bank closure or when we get a community request through. The assessment is built through rules to make sure it's consistent. We look at urban locations and rural locations slightly differently based on their catchment areas, but the rules that sit behind it are consistent. So we have four main vulnerabilities on there, some of which you've spoken about earlier on financial vulnerability. We know people, um, can use cash to budget.
That's one of the biggest reasons people use cash. Digital vulnerability that looks at both connectivity, but also things like education levels, because unfortunately, we know people maybe with lower educational levels, or if they've got a non-visible disability, need to use cash more than others. We look at age. Um, so percentage of people over 65 in a local community, because we understand again, that certainly elderly customers might have a preference or need to use cash. And the final thing is we look at proximity to next, um, provision.
So, so where do you have to travel to?We actually look at it in three ways cost to get their distance. As far as the crow flies. But more importantly, from some of the things I've heard about today, public transport times. And so that is built into the assessment process to make sure it's consistent. As I said, we've done 233 assessments and recommended 33 banking hubs so far in Scotland, and we will continue to do that every time we get a branch closure notified to us, or we see a non-designated cash solution close.
So if a post office closes, we do the same assessment in an ATM close as we do the same assessment, or if we get engagement from a local community.
10:42
Speaker 10
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Speaker 10
And just to follow that up with you, Mr. Ashton, before I go to the other members of the panel, if I can give you a very local example in my constituency of Glasgow Anniesland. Which is a local shopping street. Um, the post office went. Quickly followed this year by the Bank of Scotland, which was the last bank remaining. Two ATMs are situated in the local supermarket. Um there have been periods when both have been out of service and there has been nowhere for people to go for cash.
And that doesn't seem to me to be a very efficient way of organising a service. But it also doesn't seem to me to be a very fair way of organising a service for those people who are in those categories that we're discussing. So, you know. I realize things go wrong, things break down, but it's a relatively common occurrence. So, you know, shouldn't there be some way that we can make sure that there is always that access because people can't just wait or travel a longer distance or, um, you know, borrow money from a family member or a relative very often.
And that doesn't seem to me to be a very efficient way of organising a service. But it also doesn't seem to me to be a very fair way of organising a service for those people who are in those categories that we're discussing. So, you know. I realize things go wrong, things break down, but it's a relatively common occurrence. So, you know, shouldn't there be some way that we can make sure that there is always that access because people can't just wait or travel a longer distance or, um, you know, borrow money from a family member or a relative very often.
10:43
Speaker 14
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Speaker 14
Yeah, I agree. And what I think is important to understand about the assessment process we do, and I'm quite happy to look at individual cases. My colleague Adam's here with me today. If we want to pick up about individual cases, I'm quite happy to. Um, but what's good about the assessment process is it isn't a one and done. So we don't do it once. And then that's the assessment over and done with. We have a community request programme that people from a local community can put in assessment, ask us to do an assessment at any time.
We have a 28 day appeal process after we've formally announced a process for local representatives, including MPs and MSPs, to to challenge our decision and give us more information. If if they've got it. We also have an independent assessor who is completely independent from link, who can look at a location if it's gone through our complaint process, to make sure that we've done what we said we were going to do, and we have had examples where we have changed our decision as a result of feedback we've had from councillors and MPs across the country, some resulting in banking hubs, some resulting in extra assisted cash solutions.
Um, so Ballater and Selkirk were two that I pulled recently were actually because of engagement we've had, we've then had a look at the decision. Again and changed our decision because we've had extra information that we didn't have. I do think there is, um, a. Couple of points around ensuring we don't undermine the post office. We think that's a really important national network. And to make sure anything we put in is sustainable and inclusive. And I'm sure Poppy will talk about that in a bit more detail.
We have a 28 day appeal process after we've formally announced a process for local representatives, including MPs and MSPs, to to challenge our decision and give us more information. If if they've got it. We also have an independent assessor who is completely independent from link, who can look at a location if it's gone through our complaint process, to make sure that we've done what we said we were going to do, and we have had examples where we have changed our decision as a result of feedback we've had from councillors and MPs across the country, some resulting in banking hubs, some resulting in extra assisted cash solutions.
Um, so Ballater and Selkirk were two that I pulled recently were actually because of engagement we've had, we've then had a look at the decision. Again and changed our decision because we've had extra information that we didn't have. I do think there is, um, a. Couple of points around ensuring we don't undermine the post office. We think that's a really important national network. And to make sure anything we put in is sustainable and inclusive. And I'm sure Poppy will talk about that in a bit more detail.
10:45
10:45
10:45
10:46
Speaker 15
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Speaker 15
Where we have banking hubs, we have extremely high customer satisfaction, and we hear that customers and communities are very fond of them in in Scotland, our customer satisfaction was at 77% year to date. So 70% 77% would recommend banking hubs to their friends and family, which is unusually high for the banking industry and is in line with what we see across the rest of the UK as well. 93% of customers in Scotland so far in 2026 say they can complete what they wanted to do, what they needed to do in the banking hub.
So we feel like we are able to provide a very good service, providing access to cash and access to banking for those customers, the customers that we see using hubs do very much reflect the the demographic criteria Chris was talking about in assessment. So particularly older people who may be using cash and face to face services through habit or long experience, some who are deeply digitally excluded, whether because of their own circumstances or because of connectivity, as the committee has already talked about. But then an awful lot of younger people as well, especially those on lower incomes who are using cash as a budgeting tool or want to be able to talk someone through their their finances, because that is more challenging for them.
Um, and so across those, those customers, we, we feel it's serving that very well in terms of what makes that, that gap of this 7% of customers who can't complete what they need in a banking hub, some of those are known challenges that we are we are working with our banks to resolve people wanting to print statements. And recently, customers of some banks wanting to deposit a check and not being able to do so. Some of those are, um, other, other more peripheral, less essential needs like accessing foreign currency where there will always be some sort of some gaps that people walk in hoping to do, or in some cases, wanting to buy stamps or post their parcel.
Um, but, but we, we, we're very proud of the customer needs. We, we can serve and the path to, to filling those that, that can't be served at the moment.
So we feel like we are able to provide a very good service, providing access to cash and access to banking for those customers, the customers that we see using hubs do very much reflect the the demographic criteria Chris was talking about in assessment. So particularly older people who may be using cash and face to face services through habit or long experience, some who are deeply digitally excluded, whether because of their own circumstances or because of connectivity, as the committee has already talked about. But then an awful lot of younger people as well, especially those on lower incomes who are using cash as a budgeting tool or want to be able to talk someone through their their finances, because that is more challenging for them.
Um, and so across those, those customers, we, we feel it's serving that very well in terms of what makes that, that gap of this 7% of customers who can't complete what they need in a banking hub, some of those are known challenges that we are we are working with our banks to resolve people wanting to print statements. And recently, customers of some banks wanting to deposit a check and not being able to do so. Some of those are, um, other, other more peripheral, less essential needs like accessing foreign currency where there will always be some sort of some gaps that people walk in hoping to do, or in some cases, wanting to buy stamps or post their parcel.
Um, but, but we, we, we're very proud of the customer needs. We, we can serve and the path to, to filling those that, that can't be served at the moment.
10:47
Speaker 13
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Speaker 13
Yeah. Very much echo the, the sort of pride we feel in the role we play in the 30 banking hubs. Um, I guess also we have, there are 1200 branches, um in Scotland for the post office. Um, as I mentioned earlier, we do that, we operate those and provide cash through the banking framework, which means 99% of consumers and 95% of small businesses can access cash at their local post office. Um, in terms of what that looks like in Scotland each month, it's about um, £280 million being transacted over post office counters and just under £3 billion a year.
So some really significant volumes there. Um, we know as well in Scotland about 2 in 5 people use um cash services at post office at least monthly. And around a third would say they would struggle to manage their personal finances with their local post office. So we know it plays a really important role in communities. Um, I think your original question sort of alluded to the gap, um, that is created by a bank branch closing. Um, I've sort of outlined our role in access to cash.
I think there is a broader question around potentially what, what more could post offices do and access to banking space. Um, so we publish a report just last week, which felt quite fortuitous in terms of its timing with the Treasury banking review, um, on Post Office's role in banking. And what we found is that there is consumer appetite for, to see more at their local post office. So that's certainly something we're very mindful of. Um, and there was a green paper consultation last year on the future of post office.
And one of the sort of outcomes of that in the government's response earlier this year in February was that there was, um, you know, encouragement to explore what more we could do at post offices on that front.
So some really significant volumes there. Um, we know as well in Scotland about 2 in 5 people use um cash services at post office at least monthly. And around a third would say they would struggle to manage their personal finances with their local post office. So we know it plays a really important role in communities. Um, I think your original question sort of alluded to the gap, um, that is created by a bank branch closing. Um, I've sort of outlined our role in access to cash.
I think there is a broader question around potentially what, what more could post offices do and access to banking space. Um, so we publish a report just last week, which felt quite fortuitous in terms of its timing with the Treasury banking review, um, on Post Office's role in banking. And what we found is that there is consumer appetite for, to see more at their local post office. So that's certainly something we're very mindful of. Um, and there was a green paper consultation last year on the future of post office.
And one of the sort of outcomes of that in the government's response earlier this year in February was that there was, um, you know, encouragement to explore what more we could do at post offices on that front.
10:48
10:48
Speaker 13
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Speaker 13
There are some instances where we, um, co-locate banking hubs with post offices. That's something we're really supportive of. Um, we think it is a sustainable and sort of more cost, cost effective way of delivering both access to banking and access to cash and all the other sort of services that post office provides all under one roof. So certainly something we're really keen on.
10:49
10:49
10:49
Speaker 4
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Speaker 4
Um, probably can I. Take you up on this. So you said 77% of people in Scotland or in the Highlands, I think Scotland would recommend it. So the Highland Council area is 230 000 people. Um there's only two places with over 10,000 people. One is Fort William and one is Inverness. And I think the requirement is over 10,000 people for you guys to consider a banking hub.
10:50
10:50
Speaker 4
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Speaker 4
So there is only one banking hub in the Highlands of Scotland out of 30,000 people, and that is in Wick. And they do one day a week for TSB, one day for Royal Bank and one day of Bank of Scotland um Post office. Are closing all over the Highlands. So what we're actually having is we're not getting banking hub and I would say 77 people, 77% of people actually would say, what the heck is a banking hub in my region?So, you know, statistics and statistics, it's, it is, it is not working for the, for the North.
10:50
Speaker 15
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Speaker 15
Yeah, I think Chris is better placed to speak to, to the criteria. I think what we can do at cash access is deliver, deliver where they are recommended and ensure that the service where we do have banking hubs is, um, is high quality and can provide as many needs for customers as they can. I don't know if you wanted to come in on.
10:51
Speaker 14
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Speaker 14
I mean, it's fair to say in urban locations that 10,000 population is probably there or thereabouts, our process doesn't actually have a minimum number or a minimum number of shops, but it's fair to say if you look at urban locations and I say urban locations, co ons describe retail centres or communities as we know it as urban or rural. When we look at urban locations, we have a set of rules that we need to look within a mile of those to see what the population is. In rural locations, it's three miles, but actually we look wider than that because we look at the catchment areas.
And what also falls into that is the vulnerability measures that I spoke about earlier. So it's not just about size of location. I think that is a common, um view. That's not correct. Um we look at vulnerability measures. We look at size of the locations via population, number of SMEs. There's all sorts of things, the post office provision, the ATM provision, what banks have been there historically and closed. So there's all sorts of things that go through through the assessment centres.
Again I'll go back to it in rural locations. Um links role is to protect access to cash or free access to cash. And we do not want to undermine either undermine either the ATM, um facilities are there or the post office. Um, and therefore the assessment is built in that way.
And what also falls into that is the vulnerability measures that I spoke about earlier. So it's not just about size of location. I think that is a common, um view. That's not correct. Um we look at vulnerability measures. We look at size of the locations via population, number of SMEs. There's all sorts of things, the post office provision, the ATM provision, what banks have been there historically and closed. So there's all sorts of things that go through through the assessment centres.
Again I'll go back to it in rural locations. Um links role is to protect access to cash or free access to cash. And we do not want to undermine either undermine either the ATM, um facilities are there or the post office. Um, and therefore the assessment is built in that way.
10:52
Speaker 4
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Speaker 4
I understand that, but I think that your organisation is not considering the difference between rural and remote. So the South Skye is remote. It is 40 minutes from my house to the nearest shop by car. And and that is remote. Everybody, you know, the area is very remote and we are not being serviced. I must say, though, I do think free cash machines are excellent and widely available. So I really appreciate that. But I don't think there's there's certainly not any banking facilities and, and the post office is a fraction of what it used to be in, in remote areas.
Thank you.
Thank you.
10:53
10:53
10:53
Speaker 13
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Speaker 13
It would have been 11,500 as well. So we've had a stable network. Um I think it was around 2010 or 2011. Um when after a period of closures, um that number was fixed at 11,500. And then last year, um, as I alluded to, there was a government consultation on the future of post office where they reviewed the network requirements. So there's essentially two network requirements of post office. One was.
10:54
10:54
Speaker 13
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Speaker 13
No. So as you might expect for a branch network of that size, there's always an element of churn as people retire, resign, etc.. So there has been the sort of underlying mix of branches has changed. But what I would say is where, you know, where we do see branches close, we do see openings as well. So in the last year, we've actually opened more branches than we've closed. So I think at the latest there's just shy of 11,700 branches.
10:55
Speaker 8
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Speaker 8
So that would be my concern, Mr. Ashton, is that when you make your assessment, you have to you've got no option. You make your assessment in the here and now. You can't look at the past and you can't project forward to the future. Nobody knows the future. But in Pitlochry. And the whole Atholl and Breadalbane community up and down the A9 corridor, the last blank bank shut and there was no banking hub required by your assessment, because we have the post office in Pitlochry with a cash machine and a deeply challenging, difficult to get to dark, um atm a.
Way up the hill at the co-op. And that's, that's what banking is in Pitlochry now. Um, and if anything happens to the post office in Pitlochry, which I sincerely hope it does not. What does link do?Do you have a look back or do you rely on the public saying, hold on a minute, the post office is shut. Uh.
Way up the hill at the co-op. And that's, that's what banking is in Pitlochry now. Um, and if anything happens to the post office in Pitlochry, which I sincerely hope it does not. What does link do?Do you have a look back or do you rely on the public saying, hold on a minute, the post office is shut. Uh.
10:56
Speaker 14
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Speaker 14
So if a post office closes permanently closes, it will go through an access to cash assessment as would exactly the same process as a bank closure. We have had, um, a retail centers communities where they have lost their post office and we have done assessments and then we have recommended assisted cash solutions to replace that post office. So that is part of our process. The Post Office is a non-designated firm as far as it comes to access to cash. It's only a proportion of the banks are designated.
So we do do that on a reactive rather than a proactive basis. But we have got that process in place. I do agree around the difference between access to cash and access to banking that you and many of your colleagues have made and welcome the conversations that you personally have had with link over the last couple of years. We do hear, um, in. Lots of rural locations that the issue isn't access to cash, it's access to banking. We recognise that we welcome the access to banking review that's happening at the moment by Treasury.
You would as expected, we have submitted evidence to that. And most of our evidence is based off of the assessments we've been doing for the last four years that have highlighted the issue that rural locations are raising with us, that access to banking is is an issue we believe going forward that if there were access to banking reviews and I don't know what that the the review is going to say that they should be done alongside the access to cash reviews so that we can look at a community as a whole.
Thanks.
So we do do that on a reactive rather than a proactive basis. But we have got that process in place. I do agree around the difference between access to cash and access to banking that you and many of your colleagues have made and welcome the conversations that you personally have had with link over the last couple of years. We do hear, um, in. Lots of rural locations that the issue isn't access to cash, it's access to banking. We recognise that we welcome the access to banking review that's happening at the moment by Treasury.
You would as expected, we have submitted evidence to that. And most of our evidence is based off of the assessments we've been doing for the last four years that have highlighted the issue that rural locations are raising with us, that access to banking is is an issue we believe going forward that if there were access to banking reviews and I don't know what that the the review is going to say that they should be done alongside the access to cash reviews so that we can look at a community as a whole.
Thanks.
10:57
10:58
Speaker 14
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Speaker 14
Yeah. So as I said earlier, I agree with you statistics. So um hmm. Has gone down about 24% in Scotland since 2019. But as I said earlier, the proportion of population within one kilometre remains static. So that is due to the fact that we have got the protected ATM scheme in place where we guarantee that any high street has free access to cash within kilometre. If an ATM or the last ATM disappears from from a high street.
In effect, link will go and replace that. We will pay subsidies if needed, so financially will pay a little bit more to make sure that goes in. If it's not commercially viable. And if you look at the number of ATMs in Scotland that are protected, it's 11.3%. So over 1 in 10 ATMs is protected in Scotland. That is higher than the rest of UK. That comes in just over 9%. And that does recognise the rurality that we've been speaking about today.
Okay.
In effect, link will go and replace that. We will pay subsidies if needed, so financially will pay a little bit more to make sure that goes in. If it's not commercially viable. And if you look at the number of ATMs in Scotland that are protected, it's 11.3%. So over 1 in 10 ATMs is protected in Scotland. That is higher than the rest of UK. That comes in just over 9%. And that does recognise the rurality that we've been speaking about today.
Okay.
10:59
10:59
Speaker 14
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Speaker 14
Um so we will look at um a community whenever we get a community request through. So the assessment process, if we have a look at that community and there is an access to cash deficiency. Um, and that is um, a withdrawal deficiency only then we will put that through our direct commissioning process, which is how we go to the industry and say an ATM is needed in X location and go through that process, the process, um, can take a period of time. So it takes about 12 weeks for, for us to get someone to say, yes, I'll take that community on to deliver an ATM, but obviously they're then dependent on planning permission, uh, getting broadband, everything you need to, to put an ATM in.
But there is a process. And again, if there's any individual sites that anyone wants to speak to me about, if you've got anywhere where you think there's an access to cash deficiency, then please put a community request in or speak to me directly. And we will we will investigate that for you. Thank you.
But there is a process. And again, if there's any individual sites that anyone wants to speak to me about, if you've got anywhere where you think there's an access to cash deficiency, then please put a community request in or speak to me directly. And we will we will investigate that for you. Thank you.
11:00
11:01
Speaker 14
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Speaker 14
So we're on on track. I mean, it seems a bit of a weird thing to to achieve for 350, just to be really clear. Um, so, so I'm the executive responsible for the coordination body in link. We do not have a target of how many we should or shouldn't. So we're not going to get to 350 and suddenly stop if there's a need for access to cash facilities, if that be a banking up an ATM, we will go and fill fill that.
Um, as far as forecasting is concerned, it's a bit difficult to say if I'm honest. I'm not trying to avoid the question, but it's dependent on what the firms do as far as closures, closing bank branches. Um, because clearly, um we will only do an assessment if the last bank in town closes. So um it's a bit of a chicken and egg question really because as Eric said earlier, in a previous session, he was representing the banks. I'm not representing banks.
It depends what their commercial decisions are.
Um, as far as forecasting is concerned, it's a bit difficult to say if I'm honest. I'm not trying to avoid the question, but it's dependent on what the firms do as far as closures, closing bank branches. Um, because clearly, um we will only do an assessment if the last bank in town closes. So um it's a bit of a chicken and egg question really because as Eric said earlier, in a previous session, he was representing the banks. I'm not representing banks.
It depends what their commercial decisions are.
11:02
11:02
11:02
11:02
11:03
Speaker 14
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Speaker 14
So it's a needs based assessment process, as I said earlier, where we look at all sorts of things, um, from from residents and businesses, size of population, number of businesses locally, um, what access to cash provisions are there vulnerabilities including digital, financial age. So all those things come in. So it is a needs based. What I'm saying is there's no, no limit. If there is a need that meets the regulatory requirements, then link will recommend one.
11:03
11:03
Speaker 14
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Speaker 14
I guess again, it depends what the access to banking review comes out with to to define, firstly, in-person banking because I'm not sure that's been done. I think that's Richard Lloyds obviously chairing that banking review is one of the questions he's asked in his consultation. Um and then depending on if off the back of that, it is legislated or not, I don't personally have an opinion on that as far as Link is concerned, because we're an independent not for profit. Um, but what I do believe is if it does get to a point where access to banking reviews need to happen, that they should be happening at the same time as access to cash.
So we can look at the ecosystem as one.
So we can look at the ecosystem as one.
11:04
Speaker 14
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Speaker 14
So I believe the review is um. Finishing in October this year. Um I don't know the timelines. I'm obviously not on that committee or that review, but that's the timelines and link will keep an eye out for the outcomes of that and respond where needed. Um, we will carry on doing access to cash reviews. Um, as part of our regulatory requirement. And as I said earlier on the, the good thing, or one of the things I'm most proud of, of, of the assessment process is it's not a one and done.
We will reassess places because we know communities change, you know, houses get built, people move, their industries change, vulnerabilities go up, up and down. Um, so, so that's why we do reassessments. And it's not just a one, a one time. And then that's done. We'll revisit. And as I said earlier on in places like Ballater and Selkirk, we have um done. Reassessments and changed our decisions.
We will reassess places because we know communities change, you know, houses get built, people move, their industries change, vulnerabilities go up, up and down. Um, so, so that's why we do reassessments. And it's not just a one, a one time. And then that's done. We'll revisit. And as I said earlier on in places like Ballater and Selkirk, we have um done. Reassessments and changed our decisions.
11:05
11:06
11:06
Speaker 5
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Speaker 5
Thank you very much chair. We are and. This is really to Poppy. We are um looking at post offices and banking hubs that don't offer the full range of services that are available in bank branches are. More comprehensive models possible in places particularly far from the nearest bank. I can think of a post office in my constituency in Dunbartonshire where they would like to have a link, a cash machine, but they don't have one at the moment. In fact, I can think of two post office locations like that.
Um, so because the bank closures are creating particular difficulties for high streets and depositing cash and, and that sort of thing. Um, how effectively can the post offices and the banking hubs mitigate this impact?
Um, so because the bank closures are creating particular difficulties for high streets and depositing cash and, and that sort of thing. Um, how effectively can the post offices and the banking hubs mitigate this impact?
11:07
Speaker 15
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Speaker 15
I'll let Jack speak to post office in a minute. But in terms of banking hubs, banking hubs are not identical to bank branches, but they do provide almost all the same services as are available in bank branches. What we have to do and what we try to do at Cash Access UK is find the the balance between consistency in our services, but still providing the scope for our participating banks to differentiate themselves, because that's an important way in which they can serve their customers and they can they sell themselves as an organisation.
And so our banks decide what services their community banker provides when it is their rotor slot. Um, and so as I say, they're mostly the same as in a bank branch, but there are there are some slight differences. What we are also doing as an organisation though, is we are innovating to try to make it easier for banks to provide broader and more consistent services. We've been we've been piloting, having printers in banking hubs, which not only helps customers to print statements, but also means that those community bankers can provide more services that are, in some cases, are still reliant on scanning signatures or printing forms.
We've been piloting having video links in banking hubs so customers can speak to the specialist who can help them with their particular need, rather than solely having more, more general, more general advice. And we've been piloting, having cash access employees in banking hubs who can be there five days a week to help customers with banking needs and be a consistent face, and often a consistent community and high street figure. Can help customers often actually deal with lots of their access to banking needs there and then and where necessary, help them to connect to their banks or help them to get through the phone system.
Help them to get through the ID process, which is where, where some vulnerable customers fall down. Um, and so it's, I think the customer satisfaction and the sort of figures I quoted earlier about how many of our customers can meet their needs are something we're really proud of. We do think we're providing a very good service at the moment, but we are working on, on these innovations to mean that we can give our banks the ability to meet more customer needs in an effective way, including in locations where as as you said, Mr.
McDonald, it might be very difficult to send a community banker in person just for one day a week. And Jack, did you want to pick up on the post office?
And so our banks decide what services their community banker provides when it is their rotor slot. Um, and so as I say, they're mostly the same as in a bank branch, but there are there are some slight differences. What we are also doing as an organisation though, is we are innovating to try to make it easier for banks to provide broader and more consistent services. We've been we've been piloting, having printers in banking hubs, which not only helps customers to print statements, but also means that those community bankers can provide more services that are, in some cases, are still reliant on scanning signatures or printing forms.
We've been piloting having video links in banking hubs so customers can speak to the specialist who can help them with their particular need, rather than solely having more, more general, more general advice. And we've been piloting, having cash access employees in banking hubs who can be there five days a week to help customers with banking needs and be a consistent face, and often a consistent community and high street figure. Can help customers often actually deal with lots of their access to banking needs there and then and where necessary, help them to connect to their banks or help them to get through the phone system.
Help them to get through the ID process, which is where, where some vulnerable customers fall down. Um, and so it's, I think the customer satisfaction and the sort of figures I quoted earlier about how many of our customers can meet their needs are something we're really proud of. We do think we're providing a very good service at the moment, but we are working on, on these innovations to mean that we can give our banks the ability to meet more customer needs in an effective way, including in locations where as as you said, Mr.
McDonald, it might be very difficult to send a community banker in person just for one day a week. And Jack, did you want to pick up on the post office?
11:08
Speaker 13
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Speaker 13
Yeah, sure. So I mean, I would say post offices aren't designed to be like for like replacement for banks, as you'll know. Um, we, we provide cash services, we try and make it as easy for customers and small businesses to get in and out as quickly as they can. So be that rolling out technology, as I alluded to earlier, to so that postmasters can count cash, um, quickly. Um, we also exploring and have many dedicated banking queues so that people can come in and out.
And, you know, if you're a small business with, um, you know, thousands of pounds you want to deposit, you don't have to stand in a queue of people with sort of every returns and that sort of thing. So you can get in and out really quickly. Um, in terms of sort of mitigating the impact of a bank branch closure, um, you know, where it works really well. We do have that connectivity with the local bank branch manager. I've heard some good stories of, you know, them, um, even sort of identifying vulnerable customers, connecting them with the local postmaster, um, so that they can, at least in terms of the everyday banking services, they're signposted really clearly to the nearest post office.
Um.
And, you know, if you're a small business with, um, you know, thousands of pounds you want to deposit, you don't have to stand in a queue of people with sort of every returns and that sort of thing. So you can get in and out really quickly. Um, in terms of sort of mitigating the impact of a bank branch closure, um, you know, where it works really well. We do have that connectivity with the local bank branch manager. I've heard some good stories of, you know, them, um, even sort of identifying vulnerable customers, connecting them with the local postmaster, um, so that they can, at least in terms of the everyday banking services, they're signposted really clearly to the nearest post office.
Um.
11:09
11:09
Speaker 1
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Speaker 1
Thank you chair. I think this is more directed towards Mr. Foden and Miss Mr. Thomas. Um you had mentioned um the issues with printing but also with the ability to pay in cheques. And I know that they are two very different issues and perhaps one um is more around the partnership model and the constraints of that model and considerations like security and things like that. And also the issue with cheques, as was raised with me by um staff in a local, um, I think it was a post office when one of the banking hubs in my constituency of Bathgate and Linlithgow is more to do with a particular bank.
Its processes. So I just wonder how much the partnership model and the decisions by individual banks are actually hampering your ability to deliver a full range of services to people in the areas where there are no banks left.
Its processes. So I just wonder how much the partnership model and the decisions by individual banks are actually hampering your ability to deliver a full range of services to people in the areas where there are no banks left.
11:10
Speaker 15
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Speaker 15
So I'd say we, we, we are not a separate, uh, separate body from our banks. We are our bank, the banks working together. And so what we, what we have to, what we try to do is we preserve, say, their ability to make different decisions in how they serve their customers. Um, I think I mentioned earlier, we did see negative customer feedback around cheque deposits as, as you said, um, what we are able to do with our banks is that we get, we are constantly gathering feedback from our customers.
We've got tablets we do in banking hubs where customers can feedback. We look at this data regularly. We send out colleagues to talk anecdotally or to do particular research studies. So we can understand a lot of what what customers are seeing and what they're telling us in banking hubs, and we can share that information with our back, with our back, with our participating firms, um, particularly around those vulnerable customer segments where we have a real concentration of those sorts of customers. And perhaps particular insight into that.
And I think it's publicly reported that Lloyds have changed that decision now around depositing cheques. They're going to re-enable cheque deposits.
We've got tablets we do in banking hubs where customers can feedback. We look at this data regularly. We send out colleagues to talk anecdotally or to do particular research studies. So we can understand a lot of what what customers are seeing and what they're telling us in banking hubs, and we can share that information with our back, with our back, with our participating firms, um, particularly around those vulnerable customer segments where we have a real concentration of those sorts of customers. And perhaps particular insight into that.
And I think it's publicly reported that Lloyds have changed that decision now around depositing cheques. They're going to re-enable cheque deposits.
11:11
11:11
Speaker 15
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Speaker 15
Yeah. We have, we have been working with our with our banks to find facility to be able to print statements in hubs. And as I said, to enable some of the other journeys that depend on printers, as you referenced yourself. It is it is more complicated than than it might appear because of the need to get, uh, appropriate data security to guard against customer data being shared the day when the printer malfunctions and the customer data is left there. And so we have worked really hard with our, with our banks to create a model that can do that.
We are we have got printers in several pilot locations, including three of the hubs in Scotland. And we're working with our with our banks over the next couple of weeks of discussions to, to look at how we roll that out more broadly. Thank you.
We are we have got printers in several pilot locations, including three of the hubs in Scotland. And we're working with our with our banks over the next couple of weeks of discussions to, to look at how we roll that out more broadly. Thank you.
11:12
11:12
Speaker 4
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Speaker 4
This is one for you. Um, so many post offices in remote Scotland have closed in my area. And the reason they closed is because they're not viable. I understand that half of all post offices are not profitable at the moment, yet we are expecting the post office sector outlets to pick up the challenge of supplying cash services for rural Scotland. When a post office doesn't make any money, and yet we're happy to let the big banks who make tens of billions not provide the cash services.
So do you think there's an unfair demand on the Post Office to be effectively the bankers for rural and remote Scotland?
So do you think there's an unfair demand on the Post Office to be effectively the bankers for rural and remote Scotland?
11:13
Speaker 13
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Speaker 13
It's a good question. I think the viability of post offices these days is very much dependent on our cash business. So banking makes up about 40% of our revenue these days. Um, so, uh, you know, without providing these cash services, some post offices wouldn't become viable. Um, I take your point around viability being a real challenge, as I sort of alluded to in my opening remarks, it's very much the North star of the business at the moment. So we have a five year, um, transformation plan to 2030.
Um, one of the really core elements of that is to improve postmaster remuneration by about a quarter of £1 billion. So at the start of the plan, it was 400 million with an objective to get to 650 million. Last year we did a 20% year on year increase. So that was a £92 million increase. Um, and we're set to do another £40 million this year, so there's still more to go. I want to be really clear about that in order to make sure postmasters are fairly paid for the work they do.
But I think we have made some really good progress to ensuring that not only are existing branches more viable, but actually when it comes to a branch closing or someone retiring, if there's a local retailer, if they look at, you know, how attractive is it to run a post office?They increasingly, we hope, will go, you know what, actually, that's a business I want to run.
Um, one of the really core elements of that is to improve postmaster remuneration by about a quarter of £1 billion. So at the start of the plan, it was 400 million with an objective to get to 650 million. Last year we did a 20% year on year increase. So that was a £92 million increase. Um, and we're set to do another £40 million this year, so there's still more to go. I want to be really clear about that in order to make sure postmasters are fairly paid for the work they do.
But I think we have made some really good progress to ensuring that not only are existing branches more viable, but actually when it comes to a branch closing or someone retiring, if there's a local retailer, if they look at, you know, how attractive is it to run a post office?They increasingly, we hope, will go, you know what, actually, that's a business I want to run.
11:14
11:14
11:14
11:15
Speaker 13
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Speaker 13
I'm happy to kick off. So um as I mentioned earlier, we published a report on banking last Monday, um, where we looked at the demand for in-person banking support both today, but also into the future. Um, what we found was that there is still strong demand, particularly in the really complex moments of life. So when something goes wrong, whether that be a scam or a fraud or something goes wrong with your bank account, people want face to face support. Um, one of the really surprising things I think we found was actually, despite kind of an expectation that this would be particularly high among sort of elderly, vulnerable, digitally excluded people.
It was actually we saw really strong demand for younger people as well. So the 18 to 24 category, which which I personally found quite surprising. Um, but, but clearly there is a lot of demand.
It was actually we saw really strong demand for younger people as well. So the 18 to 24 category, which which I personally found quite surprising. Um, but, but clearly there is a lot of demand.
11:16
Speaker 16
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Speaker 16
For sort of minimum standards around in-person banking, um, potentially with geographical, uh, sort of criteria attached to that as well. Much as we have access to banking, sorry, access to cash. Um, but we are just working through what are the exact services we're talking about because that is, that is the challenge here is being really specific about what's in scope, um, as a need and then what sort of not in scope and is more of a want and sort of getting that right. The distinction between need and want is, is quite tricky in policy terms.
11:16
11:16
Speaker 7
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Speaker 7
Yeah. Perhaps to build on what Jack said, we really welcome the review. I think especially as five years or so into the banking hubs existing and testing that model, I think it's a great opportunity to take stock and look at how effectively that model is working. And the, the full range of needs that it serves. I think we feel we feel quite comfortable as an organisation that, as I talked about earlier, we've been voluntarily providing an awful lot of access to banking already far above and beyond what the what the strict interpretation of access to cash rules require.
Um, I would say there are perhaps perhaps two points I'd, I'd want to be be understood as part of this. I'd say one is um, in the same way that Eric talked earlier about not preserving a historical model of bank branches in aspic. I also think we want to preserve flexibility for our current model of banking hubs to evolve. As I was mentioning earlier, in terms of some of the innovations that we're looking at in terms of helping customers, um, speak to banking advisors, our customer liaison officers five days a week, helping customers to access services through assisted video and assisted telephony.
I think that's going to be a really important part of how customers can continue to access banking services into the future. And so we want that to be the case. And then I think it's also important to understand that, um, at least from what we hear from our customers, cash and banking needs are different. While I completely agree with Chris's point that we'd want to assess these things together, when we do behavioural research with, with customers, I think especially the further into banking you go as opposed to cash, we see customers driven a lot more by emotional and behavioural needs as opposed to pure functional needs.
Um, customers tell us that they like banking hubs because they feel like trusted environments. They feel like banks, they're environments where you can feel that you can be vulnerable and you can talk about very difficult circumstances. And so I think any future model has to preserve the ability for customers to feel safe and feel comfortable in a, in a banking space. Which, which often needs to have privacy in separate rooms. It will need to feel like a dedicated environment. And I think that would be important to consider that this is different from how you might, how you might serve cash needs, which are, which can be more functional for a lot of customers.
Um, I would say there are perhaps perhaps two points I'd, I'd want to be be understood as part of this. I'd say one is um, in the same way that Eric talked earlier about not preserving a historical model of bank branches in aspic. I also think we want to preserve flexibility for our current model of banking hubs to evolve. As I was mentioning earlier, in terms of some of the innovations that we're looking at in terms of helping customers, um, speak to banking advisors, our customer liaison officers five days a week, helping customers to access services through assisted video and assisted telephony.
I think that's going to be a really important part of how customers can continue to access banking services into the future. And so we want that to be the case. And then I think it's also important to understand that, um, at least from what we hear from our customers, cash and banking needs are different. While I completely agree with Chris's point that we'd want to assess these things together, when we do behavioural research with, with customers, I think especially the further into banking you go as opposed to cash, we see customers driven a lot more by emotional and behavioural needs as opposed to pure functional needs.
Um, customers tell us that they like banking hubs because they feel like trusted environments. They feel like banks, they're environments where you can feel that you can be vulnerable and you can talk about very difficult circumstances. And so I think any future model has to preserve the ability for customers to feel safe and feel comfortable in a, in a banking space. Which, which often needs to have privacy in separate rooms. It will need to feel like a dedicated environment. And I think that would be important to consider that this is different from how you might, how you might serve cash needs, which are, which can be more functional for a lot of customers.
11:18
Speaker 6
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Speaker 6
I would agree with what Jack and Poppy said. I think, and I've said it already a couple of times when we look at the, um, queries or questions we get from elected officials. Um, I would say 80% of them are probably around access to banking rather than access to cash. And we've fed that, fed that back. Um, and when I listen to, to, to Eric and others talk about, um, what happens in a bank, 75% of those transactions are cash transactions.
And that means 25% are, aren't. Links really keen to see what the access to banking review comes out. But I think those figures around the queries we get and the, the services that are done in, in banks and point to the fact that if you're going to do an access to banking review for a community, you should do it at the same time as an access to cash review. And we also believe that should be done by someone who's independent, because actually there's been quite a lot of power of link having that role over the last couple of years, because we have been able to engage elected officials, MPs, MSPs, local councillors to support communities.
And that means 25% are, aren't. Links really keen to see what the access to banking review comes out. But I think those figures around the queries we get and the, the services that are done in, in banks and point to the fact that if you're going to do an access to banking review for a community, you should do it at the same time as an access to cash review. And we also believe that should be done by someone who's independent, because actually there's been quite a lot of power of link having that role over the last couple of years, because we have been able to engage elected officials, MPs, MSPs, local councillors to support communities.
11:19
11:19
11:19
11:20
Speaker 16
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Speaker 16
Echo both of those comments. I think in addition to being really specific about, um, services, there is, you know, what do we mean by reasonable access?Um, we need to ensure that there is a sort of equitable outcome for all consumers and small businesses across the UK. So that might involve setting geographical sort of criteria around what that might be in practice. I think it probably, you know, it wouldn't be as. Sort of, uh, small or short. As the requirements around access to cash, it might be more like five miles or ten miles in practice.
Um, but I think in order to arrive at a really fair outcome for everyone, there will be a clear definition of reasonable access.
Um, but I think in order to arrive at a really fair outcome for everyone, there will be a clear definition of reasonable access.
11:20
Speaker 14
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Speaker 14
Thank you chair Mr. Ashton accepting you have to work to the criteria you're given by the FCA. So this is not a reflection on you as part of of the review. Would you like to see that as the crow flies criteria bend off that you don't end up saying things that frankly don't put link in a great light. For example, when the last branch closed in Pitlochry, the. The. Note. The report noted that customers could access the bank in Blairgowrie away over the mountains in East Perthshire, rather than down the road to Perth on the A9.
I think you had to say that because that's the criteria that you measure, but absolutely makes no sense to local people because it's not how people behave, it's not in step with how communities work. And when something jars like that with a community. It it doesn't help them have any confidence in the process. Um, so would you like to see that in the review?
I think you had to say that because that's the criteria that you measure, but absolutely makes no sense to local people because it's not how people behave, it's not in step with how communities work. And when something jars like that with a community. It it doesn't help them have any confidence in the process. Um, so would you like to see that in the review?
11:21
Speaker 6
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Speaker 6
So I think when we're looking at, um, proximity, I would agree it can't just be as the crow flies, it has to look at other things and there are already some things in place, as I said earlier on, travel time and cost are also included. We do have some discretion around geographical barriers that we try to use as often as possible. And one of the reasons I have a field team who go and visit locations is because every community is different. And until you've got a boot on the ground, do you use a phrase you don't know where the bus stop is on top of a hill or the ATMs in a in a dark area, you know, secluded that.
Yeah, you might use at 4:00 in the afternoon, but you wouldn't use at 8:00 at night when it goes dark. So we do have things like that. And we also have catchment areas where it's not just a circle of a kilometre or three kilometres round that it can I say it looks like a fried egg in effect when you look at it, because people travel in different ways. And we do try to use something which I haven't mentioned today called the milk test, which is if you are in a rural, a really rural place, um, a remote place, I think you said Mr.
McDonald earlier on, where do people go and buy their milk?Because that allows us to understand where people travel to. And then we can see if some of these maybe smaller towns have actually got a much bigger catchment area. Um, because people are travelling into them to, to buy their milk. So I do agree there's, there's some work to do on that, but we are already looking at um, some stuff within the assessments.
Yeah, you might use at 4:00 in the afternoon, but you wouldn't use at 8:00 at night when it goes dark. So we do have things like that. And we also have catchment areas where it's not just a circle of a kilometre or three kilometres round that it can I say it looks like a fried egg in effect when you look at it, because people travel in different ways. And we do try to use something which I haven't mentioned today called the milk test, which is if you are in a rural, a really rural place, um, a remote place, I think you said Mr.
McDonald earlier on, where do people go and buy their milk?Because that allows us to understand where people travel to. And then we can see if some of these maybe smaller towns have actually got a much bigger catchment area. Um, because people are travelling into them to, to buy their milk. So I do agree there's, there's some work to do on that, but we are already looking at um, some stuff within the assessments.
11:22
11:23
Speaker 13
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Speaker 13
Um poppy, you mentioned earlier about technology changes in terms of banking hubs. Where, where do we go in, in that direction. Are we talking about more sort of video conferencing for, for people. So they might it might not just be one day a week that they can get their, their, their main bag. It can be more open.
11:23
Speaker 7
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Speaker 7
I would say nothing is set in stone yet, but some of the things that we're piloting are exactly as you say. So um, innovation in terms of the, the staffing model. So you can have a consistent cash access. UK colleague there five days a week. We're trialling that in some locations, including one in Troon in Scotland. Um, and that means that customers are not confined by the day of the week that their bank is present. And then exactly as you say, we've been trialling.
Um so those customer liaison officers helping customers connect to their bank via phone and they can help them navigate, navigate the call centre, which I think even those of us who are more confident sometimes find challenging as well. Having video screens up, which customers often feedback so far says they really like because they feel like they can. They feel like they're talking, talking to a person, and that enabling them to talk to the right specialist in their bank as well, which is very difficult. As Eric was saying earlier, even in bank branches, you don't often have a specialist for all needs there in person.
Um, so we're, we're piloting lots of those, lots of those things at the moment. I think we'll see how those pilots go and what feedback looks like.
Um so those customer liaison officers helping customers connect to their bank via phone and they can help them navigate, navigate the call centre, which I think even those of us who are more confident sometimes find challenging as well. Having video screens up, which customers often feedback so far says they really like because they feel like they can. They feel like they're talking, talking to a person, and that enabling them to talk to the right specialist in their bank as well, which is very difficult. As Eric was saying earlier, even in bank branches, you don't often have a specialist for all needs there in person.
Um, so we're, we're piloting lots of those, lots of those things at the moment. I think we'll see how those pilots go and what feedback looks like.
11:24
11:25
Speaker 7
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Speaker 7
I think we do absolutely see that in banking hubs. Um, I think we, we've, our own research has shown that I think it's 92% of respondents talked about banking hubs as being extremely important to the local community. Um, and 88% talked about the seeing a wider value and a wider reach of that facility as well. And I think, um, so that's, that's true in what customers tell us. I think it's also true when you go into banking hubs, um, you'll often see when you go in there, um, there are repeat customers, people know the name of the banking hub operator or the community banker or the customer liaison officer.
And for personal customers, it provides a lot more of that wider value of humanising the high street. In a world where the direction of travel for so much is sort of more anonymizing. And for businesses providing that convenience such that they can continue to themselves accept cash, deposit it in hubs and and thus be able to themselves serve, serve the high street and keep that vibrant.
And for personal customers, it provides a lot more of that wider value of humanising the high street. In a world where the direction of travel for so much is sort of more anonymizing. And for businesses providing that convenience such that they can continue to themselves accept cash, deposit it in hubs and and thus be able to themselves serve, serve the high street and keep that vibrant.
11:25
Speaker 16
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Speaker 16
Very much echo that. We did some work with a consultancy a couple of years ago to try and measure the value of post offices to their high streets. Um, we found that in Scotland, um spending in post offices and neighbouring businesses sort of contributes an additional quarter of £1 billion a year that otherwise would not have occurred. So we're not only sort of bringing people to, to high streets to use the local post office as a sort of one stop shop for a range of services, be that mail and post banking and financial services products, or even government services, but also by bringing people to post offices they go on to spend on the high street.
So we see that really clearly. And just to build on the sort of trust point of postmasters, both in banking hubs and in post offices, we know that I think people trust their local post office, second only to the NHS. So we've got that really strong trust of communities, thanks to the amazing work that post Postmasters do.
So we see that really clearly. And just to build on the sort of trust point of postmasters, both in banking hubs and in post offices, we know that I think people trust their local post office, second only to the NHS. So we've got that really strong trust of communities, thanks to the amazing work that post Postmasters do.
11:26
11:26
Speaker 6
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Speaker 6
Yeah. I mean, as far as an assessment process is included, we do look at small businesses. We know that, um, cash is important to them. And actually if you look at the regulation, it talks about ensuring that there's free access to cash for small businesses and, and consumers. And it's, it's about withdrawals and deposits and coin recycling. Um, so from that point of view, we do consider, um, the number of small businesses, the needs of small businesses as well as that alongside consumers.
And when we're doing an assessment.
And when we're doing an assessment.
11:27
11:27
Speaker 6
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Speaker 6
So if I if I can go back to to kind of where I started, I think there's a couple of things. So firstly, access to cash is the remit that we're working on currently. And I think I've said that a few times. Apologies for repeating myself, but I think it's important for us to remember because one of the things when we were, we were looking at the scheme under the voluntary element, which is obviously now regulated, is we didn't want to undermine the post office.
It plays a really important role for businesses who can deposit and withdraw and get coin, coin recycling. And we also didn't want to undermine the ATM network that people, um, utilise as said, £600 million per month in Scotland is taken out through. HMM. So, so it's high. So in smaller locations, we do believe that that is an important starting starting place to consider what's already there.
It plays a really important role for businesses who can deposit and withdraw and get coin, coin recycling. And we also didn't want to undermine the ATM network that people, um, utilise as said, £600 million per month in Scotland is taken out through. HMM. So, so it's high. So in smaller locations, we do believe that that is an important starting starting place to consider what's already there.
11:28
Speaker 16
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Speaker 16
If I may, and I sort of um, building. On the question Mr. Jones asked earlier about, you know, what, what, what might good recommendations from our point of view of the Treasury's review look like?I think one of the build and sort of to build on Chris's point, um, would be to think about the existing infrastructure we have already. So the Post Office network is a publicly owned network of branches in virtually every community. We have to meet certain access criteria to make sure people have reasonable access.
So as we look to the future and think about, you know, what, how do we extend the range and reach of in-person banking support?I think that would be another sort of central tenant to think about is what more could we do with the post office network as existing infrastructure in communities?
So as we look to the future and think about, you know, what, how do we extend the range and reach of in-person banking support?I think that would be another sort of central tenant to think about is what more could we do with the post office network as existing infrastructure in communities?