The Labour Party has announced plans to significantly increase the number of “bank hubs” in shopping streets if elected to the government next month. This move aims to address concerns about the closure of branches, which has made it difficult for people, especially in rural areas, to access cash due to the shift towards online banking and card payments.
Bank hubs, managed by the UK Postal Service in collaboration with nine major banks, provide in-person banking services, transactions, and cash withdrawals. However, only 50 hubs have been opened under a voluntary agreement with banks since 2015, while 6,000 branches have been closed. Labour proposes to give the Financial Conduct Authority (FCA) new powers to support LINK, the largest ATM network, in finding new locations for 350 hubs over the next five years. Additionally, Labour would make it easier for communities to qualify for a hub.
The Conservative government has passed a law to ensure a reasonable provision of money deposits, as cashless payments have risen from 46% to 86% over the decade until 2022. However, the FCA has noted that more needs to be done to improve access to cash services where gaps have been identified. The FCA is set to introduce definitive rules in the third quarter to make it more difficult for banks to close branches without alternative cash sources.
