Today we have published our report and recommendations following our review of the Access to Banking Standard and our public consultation.
The Access to Banking Standard, an industry agreement owned by UK Finance and currently overseen by the LSB, is designed to ensure that, once a decision to close a branch has been made, customers affected are properly informed about the closure and are given appropriate support to access alternative banking services.
We launched our review into the Standard in June this year, seeking to determine whether it has been effective in ensuring the right support is provided to customers, whether the commitments from firms could be improved, and whether there needs to be changes to the oversight of bank branch closures.
The review and consultation process highlighted that the objectives of the Standard are clear and that it has successfully benefitted customers by improving communications and support following bank branch closures. Some responses did however suggest that going forwards, the Standard may not represent the most effective way of ensuring fair treatment of customers with regards to branch closures.
Many respondents highlighted that the FCA’s guidance of branch and ATM closures sets out similar expectations to that of the Standard and that having a single organisation responsible for supervising branch closures would provide clarity on firm’s expectations and therefore ensure the best possible outcome for customers affected.
To ensure good customer outcomes are protected, we have set out the following recommendations:
- We recommend that oversight of branch closures and changes in branch service provision, currently provided for through the Standard, is transitioned so that the FCA becomes the sole regulator, with firms supporting an orderly winddown of LSB oversight.
- We recommend that UK Finance and signatory firms encourage the FCA to adopt a regulatory approach that maintains or enhances the expectations on firms, currently set out in the Access to Banking Standard and supporting guidance.
- We recommend that signatory firms maintain their commitment to the Access to Banking Standard to ensure that customers continue to benefit from the protections it offers as oversight of branch closures is transitioned.
- We recommend that firms support industry efforts to provide access to in-person banking alternatives that meet the needs of personal and SME customers and take steps to support customers to use digital and physical alternatives where they are available.
The LSB believes that the best outcome for customers will now be achieved by the FCA taking forward its work, continuing its supervisory activity, and developing further rules and guidance that align with the FCA principles and which build upon the work of industry and the LSB. This approach would reflect the consensus view from industry, consumers and SME respondents to the LSB consultation that there should be clear regulatory oversight of branch closures, with a single set of rules and/or guidance for firms to follow. We are therefore also recommending that the FCA consider capturing and building on the requirements of the Standard in new rules and updated guidance.
Making these recommendations is the first step in planning for a transition of oversight. To ensure there remains a clear level of protection in place for customers, we will continue our oversight of the Standard until a clear timeframe for next step is agreed with firms, UK Finance and any other key stakeholders.
Read the report here.