JEFF PRESTRIDGE: Access to cash requires a human touch

JEFF PRESTRIDGE: The government should be applauded for presenting plans to ensure nationwide access to cash, but let’s not get too excited

How ironic that on the day the government presented its legislative plans to protect cash on the high street, Lloyds Bank took another wrecking ball into its branch network.

How many more swings of these destructive bullets will be unleashed by the big banks before the government finally gets its welcome legislation through Parliament next year? Many I’m afraid.

While the currently friendless government should be applauded for finally presenting its legislative plans to ensure nationwide access to cash, let’s not get too carried away.

Another bites the dust: Delayed government legislation has sparked a proverbial bonfire of branches and free ATMs.

After all, the government said it would legislate over two years ago, only for the pandemic to push its promise into the tall grass.

The delay sparked a proverbial bonfire of free branches and ATMs.

Banks used the cover of lockdowns to phase them out with little more than a whimper of protest as working from home and online shopping became the norm. (Most of the protest being channeled through our personal finance pages).

The rise of contactless payment and mobile banking has given big banks the perfect excuse to close branches, claiming that cash is no longer king.

Already this year, 227 branches have been closed or have been given notice of imminent closure – more than a third being Lloyds Bank brands (Bank of Scotland, Halifax and Lloyds).

I imagine that by the time the legislation is finally on the statute books, a similar amount – probably more – will have been saved. And, of course, no one in government will have batted an eyelid.

While the bulk of the legislation being considered is slim, we know it will form part of the Financial Services and Markets Bill.

We were also told that banks will be required to give consumers and small businesses convenient access to cash and cash deposit facilities.

We don’t know how practical that is – that’s yet to be determined. But the theory is that we’ll never be this far from the money – even if we’re up a hill like I was last week in the Lake District. Standing at the top of Loughrigg Fell and looking out over the glorious Rydal Water, I was still no more than 40 minutes from an array of ATMs (but no bank branches) in Ambleside.

The new legislation will be overseen by the great and good of the Financial Conduct Authority. When they’re not on strike, they make sure the banks play by the rules.

How effective the regulator will be remains to be seen, but it’s better than the current regime which allows banks to give virtually free rein to branch and ATM closures.

It is heartening to see figures like Natalie Ceeney – the leading expert on access to cash – supporting the government’s plan to legislate.

Last week, she made an excellent observation about the need for continued access to cash – in the context of the current cost of living crisis.

“Money addiction isn’t just about age,” she told me — referring to the fact that it’s often claimed that only old people are dependent on money.

“The main driver of cash addiction is poverty – access to cash is vital for the 1.5 million households who cannot afford internet access and the millions who do not have no smartphone.”

She added: “I therefore commend the government for its commitment to supporting the most vulnerable people in society, small businesses and remote and rural communities.”

What I and other banking experts such as the much-loved Derek French fear is that access to cash will become increasingly impersonal, available mostly through ATMs or cashback services in The stores.

Unfortunately, high street bank branches, offering access to face-to-face advice, will continue to get the wrecking ball treatment.

Perhaps shared banking hubs, much championed by Personal Finance and French, will eventually catch on – offering customers the chance to talk to their bank staff on certain days. I hope so.

Easy access to cash, yes please.

But let’s not forget the human touch.