The debate focused on the impact of branch closures on people who still rely on cash services and face-to-face assistance. According to the discussion in Westminster Hall, several MPs argued that some rural and smaller communities have seen banking options decline significantly, creating difficulties for residents and local businesses.
MPs Raise Concerns Over Declining Branch Access
MPs gathered to discuss the reduction of bank branches and the effect on communities where fewer physical services remain available. Caroline Voaden, MP for South Devon, said banking services in rural areas had been “decimated” and highlighted that her constituency, covering around 450 square miles, has only one remaining bank branch.
Other politicians described similar problems in their own areas. David Reed, MP for Exmouth and Exeter East, said the seaside town of Budleigh had been affected after every major bank had left the area. He said that despite its tourist economy, visitors could arrive and find there was “no access to cash whatsoever”.
Banking hubs have been introduced as one way of maintaining basic banking services after branch closures. These centres, operated by the Post Office, provide over-the-counter services including cash withdrawals and deposits.
According to MPs involved in the debate, concerns have been raised about the way decisions are made on whether a community receives a banking hub. The assessment process is handled by LINK, the UK’s cash machine network operator, which decides whether a hub is required after a bank branch closes.
Caroline Voaden said that two banking hubs in her constituency were opened before the rules changed in September 2024. She argued that the previous criteria were broader and that the current approach focuses mainly on access to cash rather than wider banking needs.
FCA Says Its Powers Focus On Protecting Cash Access
The FCA said its role is based on powers given by Parliament to protect access to cash rather than wider banking services. A spokesperson said: “Appropriate access to banking services is important. Parliament gave us powers to protect access to cash, not wider banking services.”
According to the FCA, banks and building societies have been required to address gaps in cash access, including through banking hubs, with the 250th hub expected soon. The regulator also said communities can request assessments and challenge decisions if they believe their local needs are not being met.
The organisation pointed to an ongoing independent review examining access to in-person banking services across the UK. The review is looking at the current direction of physical banking availability and the decline of services experienced by customers. The independent review is expected to deliver its final report and recommendations to the Government in October 2026. Ministers are then expected to publish the findings for the public.
