The Financial Conduct Authority (FCA) has proposed new rules to ensure customers in the UK have access to banking services.
As part of the updated guidance proposed by the FCA, banks and building societies will have to provide a more detailed analysis of how they assess the impact of branch closure, reduction in services and removal or conversion of an ATM.
The FCA, which had issued guidance on branch and ATM closure or conversion in September 2020, said some firms have “fallen short of our expectations outlined in our guidance”.
In some cases, the firms decide to shutter branches that are still being used by a large number of users, the regulator said.
Firms have also been making “decisions to remove facilities such as counter services from branches, or to permanently and significantly reduce the hours that branches are open,” it added.
The regulator has warned that some banks and building societies are not doing enough to understand the impact of these changes
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By GlobalDataThe authorities in the UK are concerned that such moves by firms will make it even more difficult for vulnerable customers to access banking services.
Last month, the UK government also proposed new measures as part of the new Financial Services and Markets Bill to ensure access to cash.
The bill also seeks to give more power to payment systems regulators to protect scam victims.
Off late, several banking groups have announced plans to reduce their branch network as digital banking gains popularity.
Most recently, Barclays decided to close further 27 branches in the UK.
FCA executive director of consumers and competition Sheldon Mills said: “We expect firms to continue to offer easy and accessible banking services to their customers, and this is even more important as the country faces a cost-of-living crisis.”