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LONDON, Oct 11 (Reuters) - Banks in Britain must have an alternative in place before closing a branch or free-to-use cash machine, the Financial Conduct Authority said on Tuesday in tougher guidance for lenders.
The FCA first issued guidance in September 2020 requiring banks to make thorough checks on the impact of permanent branch and free cash machine closures and provide the watchdog with the analysis.
The FCA said the revision, effective Tuesday, will help prevent a gap in service to customers.
More people are banking online, prompting banks to cut the number of branches, but the FCA said that about a fifth of adults with a day-to-day account regularly used a branch over the past 12 months, particularly vulnerable adults or those in financial difficulty.
As more people use contactless cards to pay for small items and meals, 6% of adults still use cash to pay for everything, the FCA said.
The government has proposed legislation to protect access to cash across the country, but it will not protect wider banking services or preserve branch networks, the FCA said.
"The industry must make sure they are supporting people and businesses who rely on cash and banking services," Sheldon Mills, FCA executive director for consumer and competition, said in a statement. (Reporting by Huw Jones; Editing by Susan Fenton)
