FCA issues major update affecting anyone with a UK bank account - Manchester Evening News

FCA issues major update affecting anyone with a UK bank account

HSBC and Nationwide recently issued an update

View Image FCA chief executive Nikhil Rathi spoke to MPs about access to banking services (Image: Parliament TV)

Financial regulators have provided an update about key changes to local banking provisions. Nikhil Rathi, chief executive of the Financial Conduct Authority, addressed the Treasury Committee regarding the preservation of face-to-face services across the UK. As the big name banks close more of their outlets, many communities are being forced to manage with diminished banking facilities and cash access.

Nevertheless, the FCA does impose specific regulations surrounding this matter. New laws took effect in 2024 mandating that banks seeking to shut a branch must conduct an assessment of how withdrawal and deposit facilities in a locality would be impacted.

Banking hubs are also being opened in areas losing outlets. These are communal facilities where customers can access services from multiple major banking institutions. However, Mr Rathi noted that some lenders are now looking to maintain their branches.

He told the committee: "It's interesting how the commercial decisions are starting to change. You're starting to see more of the major financial institutions actually seek to make a virtue of the fact that they're going to keep branches open for a certain period. That is a shift."

When pressed for examples, with the committee referencing Nationwide, Mr Rathi mentioned that HSBC had also recently made an announcement about keeping its branches open. Nationwide recently announced it would maintain all 605 of its existing branches until at least 2030.

HSBC has also pledged to keep all its current branches operational until at least 2027. However, Mr Rathi was also eager to highlight some smaller providers who are helping to preserve face-to-face services.

He said: "I'm always nervous about naming firms because there are always smaller institutions. We were in Rochdale as a team a couple of weeks ago.

"Mutuals are very present in their communities and offering more services. The Manchester Building Society just opened a branch in central Manchester, including on a weekend, to provide services to a community that was otherwise not getting access. So it's not just the big institutions."

The FCS chief was questioned by the committee about whether he would look again at the issue of face-to-face banking and maintaining proper access to cash. He said: "We are mindful of that.

"At the same time, we must remain with the remit that Parliament set for us around what the definition of access to cash was. The settled position was there can be a range of ways in which access to cash can be provided.

"Sometimes it's a Post Office counter, sometimes it's a banking hub, sometimes it's a branch, sometimes it's a deposit solution for small businesses. There's a range of different solutions, which is why LINK has been asked in each case to do a detailed community-based assessment.

"In some areas, particularly rural areas. We've heard there are very specific issues around rurality which sometimes require solutions which go beyond input solutions.

"Particularly vulnerable customers who are not able to get out of their homes easily - in person [services] isn't going to solve their issue on its own. That's why there's a range of things you have to look at."