Which? calls for regulator to protect access to cash as bank branches close

Cash machine - Image credit: Nick Ansell/PA Images

Which? is calling on the UK Government to set up a regulator to ensure people continue to have access to cash in the wake of bank branch closures.

The consumer affairs body said a combination of recent bank branch and cash machine closures risked leaving people in Scotland struggling to pay for goods and services.

Scotland has seen 399 bank branches close since 2015, making it one of the worst affected areas in the UK.

Meanwhile, 290 standalone cashpoints have closed in a year, the majority of which were free-to-use machines.

Although that is small in comparison to the 250 cashpoints that close across the UK every month, Which? said closures hit harder in Scotland due to it having so many rural communities and an “already devastated” bank branch network.

Data on cash machine withdrawals from Link also suggests that Scotland is moving away from cash more slowly than some other parts of the UK.

Scotland saw a drop of just 3.3 per cent in cash withdrawals in 2017-18, while withdrawals in London and the South East fell by 8.5 per cent and 7.7 per cent respectively.

While electronic payments are on the rise in the UK, Which? has found 73 per cent of the population still use cash frequently.

Electronic payment methods are also vulnerable to technological problems, with recent analysis finding that leading banks are suffering at least one major security or IT glitch per week, including the prolonged issues at TSB, which caused chaos for millions of customers.

But without urgent regulatory action, Which? is warning that the UK risks drifting into a cashless society that could shut people out of being able to pay for local goods and services and leave people without a non-digital alternative payment method.

Jenni Allen, managing director of Which? Money, said: “We have serious concerns that the alarming rate of cashpoint and bank branch closures risks leaving people in Scotland facing an uphill battle to access the cash they rely on.
“Cash is also a vital backup as fallible digital payments grow in popularity, so the UK Government must appoint a regulator to oversee these changes and ensure no-one is excluded and left struggling to go about their daily lives.”

Labour MP Ged Killen, who has launched a private member's bill in the House of Commons to ban ATM charges, backed the call for a statutory duty to protect access to cash.

He said: “The findings by Which? highlight the widespread closure of ATMs and bank branches which has cut off relied-on services for huge swathes of consumers, in some cases leaving those with higher access needs such as the elderly or vulnerable with nowhere to turn.”

 “The Government simply has not done enough to protect access to cash.

“Recent IT failures have shown that cash is a vital fall back when electronic systems fail. 

“Without protecting access to cash, we could inadvertently create an economy which has a structural weakness to hacking and IT failures, meaning day to day life could be severely disrupted by accident or intentional cyber-attacks.

 “We must therefore provide protections for cash in a mixed market of payment methods and seriously look at changing the law to create a statutory duty to protect access to cash.”