In response to recent retail banking closures, high street banks have committed to opening 350 new banking hubs across the UK over the next five years.
These hubs are collaborative banking spaces run by the Post Office and various lenders, with bank representatives rotating daily. The centres aim to address the problem of branch closures and the creation of “banking deserts,” as highlighted by Labour in its election manifesto.
At these hubs, customers can make cheque payments, handle cash deposits and withdrawals and interact face-to-face with banking representatives.
Despite efforts to improve access to cash services, Cash Access UK reports that only 81 hubs are currently in operation, with an additional 19 expected to open this year. By the end of 2025, 230 hubs are scheduled to be operational as per the agreement between banks and the Treasury, with a goal of having 120 more open by 2029.
Lloyds, Santander, Barclays and NatWest are among the high street financial institutions that have made the promise to Labour government City Minister, Tulip Siddiq MP.
This follows Lloyds Banking Group’s announcement that it will close 292 branches across the UK by 2025, including 45 Bank of Scotland branches, 119 Halifax branches and 128 Lloyds branches.
In addition to making services less accessible, particularly for the elderly, there are worries about job losses. For instance, TSB Bank announced in May that it would close 36 branches across the UK, resulting in the loss of 250 jobs.
To put this in context, the UK has seen over 6,000 bank branch closures since 2015, with Consumer watchdog Which? reporting that 60% of the country’s branch network has been significantly reduced in the past nine years.
The Financial Conduct Authority (FCA) has acknowledged these issues, prompting new rules aimed at safeguarding cash access for both consumers and businesses in the future.
Nevertheless, Siddiq is leading the charge and has started to lobby banks to increase the range of banking services on offer at these hubs. The lack of banking services in some communities was a key talking point for Labour both before and during the July election.
Siddiq said: “Banking hubs are a lifeline for local communities that have lost their final bank branch.
“I’m confident that the banks will deliver on the commitment made today, as well as take a more active approach to meeting the needs of local communities.”