Over the course of our campaign, Which? and more than 200,000 supporters highlighted the need for greater protection for continued free access to cash for those who need it.
Read on to learn more about the significance of these new rules for consumers.
Our campaign for free access to cash: a timeline
What is the Financial Services and Markets legislation?
The legislation aims to 'strengthen the United Kingdom's financial services industry, ensuring that it continues to act in the interest of all people and communities'.
Which? worked tirelessly on the Bill as it made its way through parliament to ensure it remained as strong as possible, and successfully campaigned for the government to introduce an amendment on free access to cash.
It said the vast majority of those who live in urban areas will have access to free cash withdrawal and deposit services within one mile of where they live, while those in rural areas can expect the same services within three miles of their home.
Banks and building societies that fail to provide free cash services within three miles could face fines under the rules.
The legislation also provides new powers to the FCA to ensure banks continue to provide adequate free access to cash.
Find out more:What are the FCA's new rules?
The financial watchdog's new rules stipulate that banks and building societies will need to weigh up if local communities lack access to cash services – such as branches and ATMs – and plug significant gaps.
Specifically, they will be required to assess cash access and check whether additional services are needed when changes are made to local services, such as the closure of a local branch.
The new rules also state that local residents and community groups will be able to request an assessment of whether there are gaps in local cash access, which providers must respond to. These requests can be made via LINK, which operates much of the UK's ATM network and co-ordinates between the FCA and banks on access to cash.
Where significant gaps are found, providers will have to deliver reasonable additional cash services.
In such cases, banks and building societies will be required to keep facilities such as branches and ATMs open until alternative cash services become available.
Find out more:How gaps in cash access could be filled
According to the FCA, any gaps could be filled with a range of measures, including banking hubs, ATMs and Post Office facilities.
Banking hubs allow staff from several banks to share the same space, helping to fill gaps left in the system from branch closures.
They have a counter service operated by the Post Office, allowing customers to conduct routine banking transactions such as withdrawing and depositing cash and paying in cheques.
Prior to winning the General Election, Labour pledged to open 350 banking hubs in towns and villages across Britain over the next five years. UK banks have since agreed to this.
Why does access to cash need protecting?
Sheldon Mills, executive director of consumers and competition at the FCA, said: 'Three million people continue to rely on cash, even as digital payments become more popular. And many small businesses still need somewhere to safely deposit their takings each day.
'That’s why we’ve acted quickly in response to new powers given to us by parliament to ensure reasonable access to cash withdrawal and deposits is maintained.'
Research published by the watchdog also found that individuals in low-income households (less than £15,000 a year), and who have low digital capability, have a higher reliance on physical cash.
Banks have closed 6,000 branches since 2015
Since January 2015, banks and building societies have closed 6,143 branches, which represents about 62% of the branches that were open at the start of 2015.
NatWest Group, which comprises NatWest, Royal Bank of Scotland and Ulster Bank, has closed 1,406 branches – the most of any banking group.
Lloyds Banking Group, made up of Lloyds Bank, Halifax and Bank of Scotland, has shut down 1,208 sites. Barclays is the individual bank that has reduced its network the most, with 1,227 branches now closed.
In total, 410 closures have been scheduled across 2024, and another 116 have been pencilled in for 2025.
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