Banks Sign up to Closure Guidelines

As we know, the rate of bank closures has increased and is justified by the move to online and other digital banking. The Government has requested that banks should minimise the effect of branch closures.

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Banks sign up to closure guidelines

An agreement to help prevent consumers being left out in the cold when their local bank shuts down has been signed up to by major high street banks, consumer groups and the Government.
Banks have signed up to a protocol designed to minimise the effect of branch closures Banks have signed up to a protocol designed to minimise the effect of branch closures

The British Bankers’ Association (BBA) has agreed guidelines after Business Secretary Vince Cable wrote to banks in December, calling for clear procedures for the steps they would take when closing a branch to ensure customers in rural and deprived areas do not lose out.

The protocol, which will be reviewed by an independent reviewer after one year, commits the banks to work with local communities to establish the impact of a branch closure before it takes place, find suitable alternative provision and put satisfactory alternative banking services in place before a branch is closed.

Options for possible satisfactory alternatives would include free to use cash machines, alternative branches, and Post Office branches and mobile banking arrangements.

A majority of the banks’ customers can already access banking services via the Post Office, which has more than 11,500 branches.

This role is set to increase with the BBA, banks and the Post Office negotiating to standardise the services available to the banks’ customers, including small business customers, at Post Office branches.

Anthony Browne, chief executive of BBA, said: “The way we bank is changing, with millions of us now embracing a range of digital services to spend, move and manage our money.

“Because of this change in customer behaviour banks are investing more heavily in innovative technology to make banking quicker and more convenient. This means that the number of branches is falling.”

He said the agreement ” will make sure customers still have banking services close at hand if a branch closes. Communities will be given fair notice of any closure and clarity about the alternative places and ways to bank”.

Nick Kennett, director of Post Office Financial Services said: “The Post Office is unique in providing people with easy access to banking services throughout the UK.

“The banks can establish commercial arrangements with us, so that we can meet the needs of both their personal and businesses customers.”

New research from consumer group Which? has found that f our in 10 (41%) people still use the local branch of their high street bank at least once a month.

The survey of more than 2,000 people found that 37% would find it an inconvenience if their local high-street bank branch closed and three in ten (30%) would consider switching banks, showing the importance of introducing alternatives for customers.

The most popular alternatives for consumers, if their high-street bank closed, were found to be ATMs providing other services, the bank operating in another location such as a supermarket, banking provided in the Post Office, or shared branches.

Banking in a nearby location such as a supermarket was the most popular option among older age groups. Which? found that 47% of 55 to 64-year-olds and 46% of people aged 65 and over would like to see this, compared to 39% for all age groups.

In rural areas, banks providing services at the Post Office or in another location were the most popular alternatives, favoured by 41% of people.

Which? executive director, Richard Lloyd, said: “Today’s agreement is the first step towards ensuring banks will not leave customers out in the cold when branches close. It will provide some reassurance to vulnerable people who often rely on face-to-face banking and aren’t able to bank online or travel to other branches.

“We expect the banks to stick to their word and ensure all consumers can access vital banking services, no matter where they live. Next year’s independent review of this agreement will be an important test of the banks’ commitment to regaining the trust of consumers.”

Mr Cable said: “People are increasingly banking online, but it’s not necessarily an option for everyone and we must ensure people are not left behind. This industry agreement recognises those concerns, commits to finding alternatives and is a major step forward.”

Posted in News Items National.