Emma RadmoreFCA has published new, updated guidance for banks, setting additional expectations on them when they are considering closing branches or ATMs. FCA has seen some good practices develop since it originally published guidance in 2020, such as where banks consider whether a closure may result in significantly longer queues at alternative branches and increase resource there before proceeding with the planned closure. FCA has asked banks to pause closures where they have not met its expectations and has now further clarified what it expects banks to do. The guidance, alongside the proposals in the FSM Bill on access to cash, should be helpful to consumers, although FCA notes that the access to cash plans, while welcome, will not extend to the provision of wider banking services.
The updated guidance applies not only to planned closures but also to planned reductions in service.
In principle, firms will need:
- to tell FCA in good time of their plans;
- be able to show it has analysed the effect on the customers using the sites and the likely impact of the plans, and to be able to provide FCA with a clear summary of the results of the analysis;
- to make sure that any proposed alternative service is in place and accessible to customers before a branch closure; and
- to communicate their plans to customers and stakeholders no less than 12 weeks before implementation, including telling them the alternative ways to access services – and should make a summary of their analysis of the merits of closure easily accessible.
FCA expects the guidance to remain relevant in the future and says its aims are also consistent with the Consumer Duty – but it will revise it as appropriate as the FSM Bill and other initiatives progress.
