Let’s never forget the human side to banking

HOW ironic that on the day the Government outlined its legislative plans to safeguard cash on the high street, Lloyds Bank took another wrecking ball to its branch network.

How many more swings of such destructive balls will be triggered by the big banks before the Government finally gets its welcome legislation through Parliament sometime next year? Quite a few I fear.

Although the Government, currently short on friends, should be applauded for finally outlining its legislative plans on ensuring nationwide access to cash, let’s not get too carried away.

After all, the Government said it would legislate more than two years ago, only for the pandemic to push its promise into the long grass.

The delay has sparked a proverbial bonfire of branches and free-to-use cashpoint machines.

Banks have used the cover of lockdowns to go about their culling without more than a whimper of protest as home-working and online shopping became the norms. (Most of the protest being channelled through our Personal Finance pages).

The rise and rise of contactless payment and mobile banking has given the big banks the perfect excuse to close branches, claiming cash is no longer king.

Already this year, 227 branches have either been closed or put on notice of impending closure – more than a third being Lloyds Bank brands (Bank of Scotland, Halifax and Lloyds).

I imagine that by the time legislation finally gets on the statute book, a similar amount – probably more – will have been given the chop. And, for sure, no one in Government will have batted an eyelid.

Although the nitty gritty of the planned legislation is thin, we know it will form part of the Financial Services and Markets Bill.

We have also been told the banks will be required to give both consumers and small businesses convenient access to cash and cash deposit facilities.

How convenient we don’t know – that has yet to be worked out. But the theory is that we will never be that far from cash – even if we’re up a hill as I was last week in the Lake District. Standing on top of Loughrigg Fell and looking down on glorious Rydal Water, I was still no more than 40 minutes away from an array of cashpoint machines (but not bank branches) in Ambleside.

The new legislation will be overseen by the great and good of the Financial Conduct Authority. When not on strike, they will ensure the banks are complying with the rules.

How effective the regulator will be remains to be seen, but it’s better than the current regime which allows the banks pretty much a free rein on branch and cashpoint machine closures.

It’s heartening that the likes of Natalie Ceeney – the leading expert on access to cash – support the Government’s plan to legislate.

Last week, she made an excellent observation about the need for continued access to cash – in the context of the current costof-living crisis.

‘Reliance on cash isn’t simply about age,’ she told me – referring to the fact that it’s often argued it is only the elderly who are cash-dependent.

‘The biggest driver of reliance on cash is poverty – access to cash is vital for those 1.5 million households who can’t afford internet access and the millions who don’t own a smartphone.’

SHE added: ‘So I commend the Government for its commitment to supporting the most vulnerable people in society, small businesses and remote and rural communities.’

What I – and other banking experts such as the wellregarded Derek French – fear is that access to cash will become increasingly impersonal, available primarily through either cashpoint machines or cashback services in shops.

Sadly, high street bank branches, offering access to face-to-face advice, will continue to get the wrecking ball treatment.

Maybe shared banking hubs, much championed by Personal Finance and French, will finally catch on – providing the chance for customers to speak to personnel from their bank on selected days. I do hope so.

Easy high street access to cash, yes please.

But let’s not forget the human touch.