FCA launches consultation over rules to retain free cash access


A new set of rules regarding cash access have been proposed by the Financial Conduct Authority (FCA) in response to the constantly evolving digital landscape.

According to the proposals, banks and building societies will be required to proactively look for and address any gaps that might obstruct the free access to cash by personal and business customers.

This approach would require firms to take various local factors into consideration, such as demographics and transport.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, commented: “We know that, while there is an increasing shift to digital payments, over three million consumers still rely on cash – particularly people who may be vulnerable – as well as many small businesses. It’s important that we support consumers impacted by recent innovations.

“These proposals set out how banks and building societies will need to assess and plug gaps in local cash provision. This will help manage the pace of change and ensure that people can continue to access cash if they need it.”

Additional data revealed by the FCA highlighted that as of Q1 2023, 95.1% of the UK population have a free-to-use cash withdrawal point within one mile of their location. Almost everyone (99.7%) in the UK can access such a point within a three-mile radius – a result of the UK Treasury’s recent policies

Despite this, the regulator warned that local needs may change over time and that financial institutions should be closely following this.

The proposals address this by suggesting that designated firms should “undertake cash access assessments when changes are being made to cash access services”.

This would be followed by the delivery of “reasonable additional cash services where assessments show that there is or will be a significant local gap”, as well as regular communications with “local residents, community organisations and representatives to consider, assess and plug gaps”.

In the midst of a banking branch closure spree, the proposals do not explicitly prevent this from happening further, but do set specific rules in place that ensure additional measures in areas where branches are a key local source of cash.  

Utilising its newly-granted powers by the Financial Services and Markets Act 2023, the FCA launched a consultation paper that will be open to businesses until 8 February, 2024.

The Financial Services and Markets Act 2023 (FSMA23) confirms the FCA’s leading role in regulating access to cash. The FCA has a new requirement to ensure a reasonable provision of cash deposit and withdrawal services in the UK and is developing rules to deliver this commitment.

The consultation’s launch was welcomed by the UK’s Payment Systems Regulator with the following comment: “The PSR retains its important role in regulating the LINK ATM network as it continues to deliver our objectives of meeting service users’ needs, as well as supporting the FCA in its new role to ensure cash infrastructure across the UK remains reliant, resilient and sustainable.”