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Urgent action needed before it’s too late for banks in Wales

17/10/2019

The National Assembly's Economy, Infrastructure and Skills Committee is today launching an alarming report on access to banking and ATMs across Wales. 

Between January 2015 and August 2019, Wales lost over two fifths of its bank branches, 239 in all.

Responding to the recent escalation of bank closures, today the National Assembly's Economy, Infrastructure and Skills Committee is outlining calls for the Welsh Government to act urgently.


Access to banking – the statistics

Findings from the Committee's public consultation and a number of surveys by Which?, LINK, the UK Government and the Payment Systems Regulator reveal the extent of the problem and likely impact on members of the public across the country.

  • 87% of personal banking customers said the closure of bank branches had an impact on them.

  • 36% of people said: "It now takes me up to an additional 30 minutes to access a bank".

  • 50% of people said: "Previous bank branch closures have restricted access to ATM or other free cash withdrawal facilities".

  • The number of free-to-use ATMs in Wales fell by 10% (2,517 to 2,281) between March 2018 and March 2019.

  • 51% of over 75s in Wales are not regular internet users.

  • 26% of those negatively affected said:  "Better WiFi and/or internet connectivity would help."

Urgent action needed

Access to banking and free cash machines in Wales is not a new concern, however the scale of closures continues to escalate at an alarming rate.

The Committee is recommending that the Welsh Government urgently map out banking services and ATMs to assess the real impact these closures are having on people, especially vulnerable people, elderly people, small businesses and those who rely on cash.

The Committee's inquiry has investigated a number of areas where the Welsh Government can intervene and make a difference:


1. Access to cash

There are a number of UK-wide strategies working to make sure there are enough ATMs available. The Committee is urging the Welsh Government to make Wales' voice heard at a UK-level and make sure that the actions being taken by the UK Government's Joint Authorities Cash Strategy Group to safeguard access to cash work for Wales.

The Welsh Government must also continue to work with LINK and the regulators to strengthen the free-to-use ATM network, and ensure that machines are where they needed most.


2. Town centres, high streets and planning rules

The Committee heard from a number of organisations about the impact that bank closures has had on communities, town centres and high streets and the loss of free-to-use ATMs. The Committee is calling on the Welsh Government to outline how it intends to consider the impact on communities of bank closures in conjunction with its community regeneration activities.

Banking facilities are often lost with the changing nature of high streets and modern developments. The Welsh Government and local councils should use planning rules to protect banks and make sure that councils' local development plans maintain cash infrastructure when forward planning for communities.


3. Digital banking and connectivity

Data from Which? and the results of the Committee's consultation show that a lot of people are unwilling or unable to move to accessing services digitally. The Committee heard evidence that older people in particular are unable to use or do not trust online banking.

No amount of financial education or digital training will help if connectivity issues are not resolved. When the Committee asked those negatively affected by bank closures what could be done to help, 26% of those surveyed said 'better WiFi and/or internet connectivity'.


4. Banc Cambria - A Community Bank

The Welsh Government has recently approved initial funding to support the development of a community bank for Wales, Banc Cambria. The Committee heard a number of concerns about the feasibility of a community bank and how there are less costly ways of providing community banking facilities.

Evidence given to the Committee stated that even a mutual community bank will be faced with the reality of the cost of maintaining a branch network, particularly in rural areas with relatively small footfall.

The Committee are calling on the Welsh Government to provide detail on how it will manage the risks associated with putting public money into the un-tested Community Savings Bank Association banking model, and clarify the level of future support it anticipates offering the community bank.

The Committee is also asking the Welsh Government to confirm whether it is confident the Banc Cambria proposal will actually provide physical face-to-face banking services for elderly, disabled and vulnerable customers.


Russell George AM, chair of the Economy, Infrastructure and Skills Committee said: 

"Time and time again we are hearing about an alarming escalation of bank closures and the loss of cash machines across Wales. This is not a new problem but it recent years the losses are hitting communities hard.

"As well as the obvious difficulties the loss of banks and cash machines is causing problems for vulnerable and elderly people who do not use online banking services and these losses are also hitting our high streets and small businesses.

"Our committee is agreed that we cannot sit back and ignore the problem and while many elements of this issue are a matter for the UK Government, there are significant levers at the Welsh Government's disposal.

"The Welsh Government should be looking at how best to provide free-to-use cash machines, working with organisations such as LINK, to strengthen the network.

"The Welsh Government can also look at changing planning rules to protect banking facilities and incorporate the need for banks in their work on town centre regeneration.

"The proposal for a community bank is one that is worth looking at, however we have heard some concerning evidence, questioning the viability of such a project and this may not be the best use of public money to solve the problem. We heard other ideas for how banking providers can collaborate to provide much-needed services such as through shared branch 'hubs'.

"We heard how existing banks are closing branches because of the cost of keeping them open in areas of low footfall – this would also be a significant challenge for a new community bank, providing face-to-face services.

"Wales is not ready to go cashless and online banking is not right or possible for everyone. Our report today provides a number of recommendations for the Welsh Government which I hope they will take on board an take action to protect what is left of our valuable banking network."


 

Read the full report:

Access to Banking (PDF, 564 KB)

 


 

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