Post Office seals deal with mobile-only bank

THE Post Office has signed a deal with a mobile-only bank for the first time amid concerns branch closures and a drop in numbers of free cash machines are leaving those in remote areas vulnerable.

Starling Bank, which was set up four years ago, has become the first digital bank to pair up with the Post Office so that customers living in rural areas or “bank branch deserts” can deposit and withdraw cash. Savage cuts to branches have raised concerns that vulnerable people living in the countryside are now unable to easily access certain services, prompting MPS to launch an inquiry into the finance sector yesterday. The UK has lost 53pc of its bank branches since 1989.

The Starling deal will go live on Monday, just days after MPS raised concerns about bank branch cuts and the lack of free cash machines available.

The Commons Treasury select committee will spend the coming months examining whether vulnerable customers are being blocked from accessing services and will check “what role the Government could play in maintaining the Post Office network to provide shared services”.

The soaring demand for online banking has caused under-pressure banks to pour money into technology and slash branches. However, the trend has raised concerns that some people, particularly those who can’t or rarely use the internet, are being left behind. Earlier this year it emerged that 50pc of rural inhabitants access the internet daily, compared to 74pc in urban areas. The committee will look at how banks cater to those with no easy access to a branch and whether there are barriers that could lead some to not having a bank account at all.

The intervention comes days after Lloyds, which has announced the closure of more than 100 branches in less than a year, said it was restructuring the business to focus more on digital expansion. The Royal Bank of Scotland has closed more than 475 branches since last December.