The UK’s financial services watchdog has proposed measures that will force banks to look more closely at how their decisions impact consumers.
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The number of banks on the UK High Street has been devastated in recent years, and the FCA has today proposed new guidance that will force banks and building societies to assess the impact of changes to their services.
Banks will need to evaluate how moves such as branch closures, shortening branch opening times, removing or converting ATMs, or reducing the services they provide may affect customers under the new proposals.
The watchdog warned that some banks and building societies “are not currently doing enough” to properly understand the impact of these changes and to keep their customers informed.
The proposals come amid widespread announcements of closures. Lloyds, Halifax, and Bank of Scotland are set to lose 136 branches by the end of the year, and TSB has already closed 44 this year, with a further 26 planned for this month.
The proposals also included plans for banks to extend communications to groups like local charities and councils, to better understand the wider impact from changes to services.
The proposed update isn’t the first step the FCA has taken to protect access to banking services.
The watchdog initially published guidance governing branch closures and conversions in 2020 in the immediate wake of the pandemic.
The FCA said it has recently published examples of good practice, highlighting where improvements are needed for firms considering closures.
In addition, the Government recently confirmed that the FCA will be given powers to make sure cash remains accessible.
Sheldon Mills, executive director of consumers and competition at the FCA, said it’s important that firms keep providing accessible banking services, particularly during the close of the living crisis.
“We saw firms successfully do this and support consumers through the pandemic, and this standard needs to continue with firms really thinking about their customers, especially those in vulnerable circumstances, and ensuring they continue to meet their needs,’ Mills said.
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