Closures of bank branches and reduced opening hours in the spotlight

Banks that close tellers or reduce opening hours will be required to assess the impact of those changes in the same way as permanent branch closures, the city watchdog reveals.

The Financial Conduct Authority (FCA) seeks to extend the protection of people accessing banking services.

While the government recently confirmed that the FCA would be empowered to ensure cash remains accessible despite rapid bank branch closures, the regulator has said it is seeing firms make decisions to cut facilities, such as branch counter services.

Additionally, there are also instances where branch opening hours are permanently and significantly reduced, sometimes as a result of temporary changes introduced due to Covid-19.

The FCA has said such “partial closures” are not currently covered by its guidance and as such it wants to ensure that its expectations in such circumstances are clear to businesses and customers.

The updated guidance consultation says: ‘When companies are planning significant changes to services customers attend in person, we want to ensure they assess customer needs and consider the availability and provision of alternatives. We want companies to effectively support customers through all transitions triggered by access changes.

“We want to expand our guidelines so that they apply when businesses partially close a branch in the same way as they do for full closures.”

The FCA said it proposed to define a “partial closure” as a long-term reduction in the hours or days that branches are open or a reduction in branch services, such as the removal of a counter, when this would have a “significant impact on customers”. This would also apply to a reduction in the opening hours of in-house extended-hour ATMs.

It comes as the FCA has warned that some banks and building societies are currently not doing enough to fully understand the impact of these changes and to keep their customers informed. Extending communications to other groups such as charities and local councils to understand the wider impact of service changes is also included in the proposals.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA, said:“We expect companies to continue to offer simple and accessible banking services to their customers, and this is all the more important as the country faces a cost of living crisis. We’ve seen companies do this successfully and support consumers during the pandemic, and that standard needs to continue with companies really thinking about their customers, especially those in vulnerable circumstances, and making sure they continue. to meet their needs.

The consultation runs until July 26 and CAF. It will review the responses before finalizing the guidance later this year.