Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the potential impact of bank branch closures in rural areas on customers reliant on in-person banking services.

Banking is changing, with many customers benefitting from the convenience and flexibility of managing their finances remotely. However, the Government understands the importance of in-person banking services to communities and high streets and is committed to supporting the financial services industry’s roll-out of 350 banking hubs by the end of this Parliament. Over 270 hubs have been announced so far, and more than 225 are already open.

Where banks make commercial decisions to reduce their branch network, they are required by the Financial Conduct Authority (FCA) to carefully consider the impact on customers’ everyday banking and cash access needs and to put appropriate alternative arrangements in place, where needed.

Banking hub locations are independently recommended by LINK, the operator of UK’s largest ATM network. When a bank branch closes, or there is a material change to a cash service, or a community request is received, LINK conducts an access to cash assessment under the access to cash regime set out in the Financial Services and Markets Act 2023. In its assessments, LINK takes into consideration a wide range of criteria, including population demographics and public transport links. The criteria also differentiate between rural and urban areas, with a wider three-mile catchment applied in rural locations to recognise that villages often depend on nearby market towns.

Customers can also access everyday banking services through the Post Office. The Post Office Banking Framework allows personal and business customers to withdraw and deposit cash, check balances and pay bills at over 10,000 Post Office branches across the UK.

Some banks also provide points of access through initiatives such as pop-up services in libraries and community centres, or mobile banking vans serving rural and remote areas. The Government supports initiatives which give customers access to in-person banking, as well as digital access.

The Government keeps the effectiveness of current arrangements under review through regular engagement with stakeholders to ensure they meet the needs of local communities.