Last December, the UK’s Financial Conduct Authority (FCA) access to cash consultation outlined plans to alleviate consumer fears that those relying on cash would not be left alienated.
The financial regulator proposed a new regime which would require banks and building societies to “assess and fill gaps, or potential gaps, in cash access provision that significantly impact consumers and businesses”.
Upon this consultation release, the FCA called upon customers, banking providers and other financial institutions to submit their own proposals by 8 February which will enable the regulator to formalise rules surrounding access to cash in Q3 of 2024.
Steve Round, Co-Founder of SaaScada and former Chair of The Big Issue Foundation, believes that those who rely on cash, such as elderly people and low-income households, are at risk of being negatively impacted and neglected.
He said: “Despite the meteoric shift to digital payments, this is a key step in the FCA’s journey to return life to the UK’s cash deserts and protect the three million UK consumers who rely on access to cash.
“It is often the most vulnerable groups in our society – low-income individuals, the elderly, and rural populations – who rely on cash. If banks fail to plug gaps in access to cash, we risk deepening inequality and reinforcing barriers to financial services, which could leave millions of adults disconnected.
“Under the new proposals, banks will be forced to reassess the services they provide so vulnerable customers are not locked out of financial systems by a no-compromise cashless society.”
The proliferation of digital payments has accelerated tenfold over the past several years and whilst payment innovations have delivered transactions quicker than ever before, not everyone in the UK has the capabilities to access such technological advancements.
This is why the FCA is introducing better access to cash by proposing to the UK government that companies that provide current accounts to personal or business customers be provided with the services to provide cash in a meaningful and seamless manner.
The regulator also implored that small and medium enterprises (SMEs) who rely on cash also be provided with additional services, which in turn, could see smaller businesses contribute even further to the country’s economy.
Round added that with the cash support in place for SMEs this would also serve as a benefactor for those living in local communities.
He said: “Small to medium-sized businesses will also benefit from the latest proposals. Cash is still essential for the day-to-day running of many small, community-focussed businesses. It offers customers greater flexibility, which a completely cashless system would render impossible.
“If SMBs receive quality support from financial regulators, they can thrive – and so can local communities.
“Everyone has the right to spend and bank how they wish. If that means facial recognition and digital wallets, then the technology is ready. But cash-preferred customers who seek physical interaction and the 50% of SMBs who rely heavily on cash, matter too.”
Whilst the FCA begins to release a policy statement regarding access to cash proposals, the regulatory body is also giving entities additional time to carry out cash access assessments for the first three months once actions are put in place in Q3 2024.