Following the news of
HSBC installing its first ever ‘cash pod’ in Nasilea, North Somerset comes the questioning of how the general public will gain access to cash among numerous bank branch shutdowns.
HSBC announced the closing down of 114 bank branches in the UK from April 2023, reporting the reason for the closures due to low footfall for in-person banking services.
The HSBC ‘cash pod’ is essentially an ATM that allows HSBC customers to withdraw cash, print a mini bank statement, and access PIN services in remote locations where cash is not available. The first 10 HSBC ‘cash pods’ are expected to open in various UK
locations throughout the year.
Other major UK banks, including Lloyds, Halifax, Barclays, NatWest, Bank of Scotland, Ulster Bank, and RBS reported closures in 2024 according to
DailyMail, totaling over 180 bank branches closing. These banks already closed numerous branches in 2023, with
Barclays shutting down 180,
Lloyds 85,
NatWest 138, and Halifax 52. Earlier this week,
TSB announced a plan to cut branches and jobs to save costs.
The major shift away from the high street indicates the uptake of online banking and usage of digital customer services, which is often faster and more efficient, especially to the younger generation that has an affinity for mobile payments and digital wallets.
The rapid succession of shuttering banks even raised the question
if generative AI can replace bank branches. However, with the increased shutdown of banking spaces, there leaves a gap for the digitally unbanked or underbanked who need cash and in-person banking services.
The
Financial Times recorded that one in eight UK bank branches closed in 2023, demonstrating the decline of cash, and that almost three-fifths of the bank branch network has disappeared since 2015.
The widespread closures of bank branches has had a significant impact on local communities and has been negatively affecting those with disabilities, rural communities, and the older generation. A report from the
UK Parliament stated that people with cognitive disabilities or impairments have been finding it difficult to use online services with limited access points.
Consumer group
Which? found in a survey that those with disabilities were most reliant on cash an in-person banking, and 52% of respondents to a survey with a disability or impairment stated that bank branch closures had a negative impact on their banking experiences.
Additionally, older people could be at a high risk for becoming underbanked or unbanked due an inability to manage their money online. A survey by
Age UK recorded that 75% of respondents preferred to undertake at least one financial task in-person at a bank branch.
Reducing bank branches in rural areas can also cause issues for local communities where there is poor broadband or mobile signal that are required to access online banking services.
In response to backlash over major bank closures, the UK government and financial regulator the Financial Conduct Authority (FCA) have made efforts to ensure cash availability. The Financial Services and Markets Act 2023 includes provisions so that cash
access services, including cash deposits and withdrawals, are available, if not at bank branches then at post offices and other governmental buildings.
The FCA has also taken action against banks to reduce the impact of bank closings, including providing guidance to banks that intend to close a large number of branches to include provisions to fill the access gap left by the closures. The FCA continues
to run consultations to ensure that cash is accessible where needed and that banks are setting up ATMs where there are major bank branch shutdowns. However, 2022 guidance revealed that several banks were not keeping up with guidelines and causing further divisions
among underbanked and unbanked populations.
The
Labour Party also stated last year that it will lay out provisions to limit the affect of bank closures, working alongside regulators to ensure that necessary face-to-face services are not compromised.
While banks, such as HSBC are filling up the need of the public with their ‘cash pods’, of which incoming cash pods will be powered by solar panels and aim to bring bike racks, greenery, and other small additions to the local community along with supplying
a service, there is more that can be done to by major banks to ensure the financially excluded do not remain so.