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Bank counter closures and reduced opening hours under the spotlight

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Banks which close counter services or reduce their opening hours will be required to assess the impact of these changes in the same way as permanent branch closures, the city watchdog reveals.

The Financial Conduct Authority (FCA) is looking to extend protections for people accessing banking services.

While the government recently confirmed that the FCA will be given powers to make sure cash remains accessible amid rapid bank branch closures, the regulator said it is seeing firms making decisions to remove facilities, such as counter services from branches.

Further, there are also instances where branch opening hours are permanently and significantly reduced, sometimes following temporary changes introduced because of Covid-19.

The FCA said these ‘partial closures’ are currently not covered by its guidance and as such it wants to ensure its expectations in such circumstances are clear for firms and customers.

The updated guidance consultation, states: “Where firms plan significant changes to services that customers attend in person, we want to ensure that they assess customers’ needs and consider the availability and provision of alternatives. We want firms to support customers effectively through any transitions triggered by changes to access.

“We want to extend our guidance so that it applies where firms partially close a branch in the same way as it does to full closures.”

The FCA said it proposes to define a ‘partial closure’ as a long-term reduction in branch opening hours or days or reduction in branch services, such as the removal of a counter, where this would have a “significant impact on customers”. It would also apply to a reduction in hours of internal extended hours ATMs.

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

Sheldon Mills, executive director of consumers and competition at the FCA, said: “We expect firms to continue to offer easy and accessible banking services to their customers, and this is even more important as the country faces a cost-of-living crisis. We saw firms successfully do this and support consumers through the pandemic, and this standard needs to continue with firms really thinking about their customers, especially those in vulnerable circumstances, and ensuring they continue to meet their needs.”

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

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