Cash liquidity crisis with the disappearance of half of bank branches in seven years

More than a million people primarily use cash when doing their everyday shopping, according to UK Finance, a trade body.

Caroline Abrahams, of charity Age UK, said: “For people who are unfamiliar with digital banking, these lockdowns can make life very difficult.

Older people are often fiercely independent and want to continue to manage their own affairs. But being cut off from their local banks could undermine their financial independence. At best they will be inconvenienced, but at worst they will risk cutting their money.”

She said pushing unprepared customers online could make them more vulnerable to scams. Online fraud has skyrocketed during the cost of living crisis, as criminals target victims with financial concerns.

Ms Abrahams said: “Banks have introduced a lot of barriers to help protect your money online, but they make the process more complicated.

Take two-factor authentication [where extra verification is used to prove an identity] – Most of the time, a smartphone is required and not many elderly people have it.

ATM Network Link recently found that nearly half of people were somewhere where cash was not accepted or discouraged.

“For all the talk about the death of cash,” said Graham Mott, director of strategy at Link, “I think it’s worth reminding ourselves how important cash is. Compared to 2021, the number of transactions this year is up about 5%. On a year-over-year basis, we’re also seeing people taking More cash when they visit ATMs.”

An FCA spokesperson said: “We expect businesses to continue to provide accessible banking services to all their customers and ensure they can continue to meet the needs of customers, particularly those in vulnerable circumstances, before closing a branch or reducing services.

“Businesses should ensure that any closure plans are clearly explained and should provide alternative solutions, such as banking centres, if necessary.”

UK Finance figures show that 1.1 million people primarily use cash when doing their everyday shopping. A spokesperson said: “The total number of cash payments fell by 1.7% last year and we expect cash use to continue to fall, with cash expected to account for 6% of all payments made in the UK by 2031.

“The banking and financial industry is committed to preserving access to cash for those who need it, including through banking centers, free ATMs, enhanced post office services and cashback without a purchase.”

On bank branch closures, the spokesperson said: “While many customers choose to use mobile and online banking to manage their money, the banking industry is committed to ensuring that people can do their banking face-to-face as well.
“When a bank branch closes, Link independently assesses the cash access needs of the local community and will commission any new services needed, which could include a banking center.”

A Barclays spokesperson said: “We maintain our community presence with alternative options for customers who still require in-person support. This includes our network of local Barclays locations in libraries and community centres, bank kiosks and mobile vans, cash back without a purchase and shared banking centres. , and daily banking at the post office.”

A spokesperson for the NatWest Group, which includes the Royal Bank of Scotland, said it was investing to support people facing challenges in moving online. Lloyds declined to comment.

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