Future of cash and banking services
Post Office has published new research on the future of cash and in-person banking services, and the role post offices could play in supporting access for customers, small businesses and communities across the UK.
You can download the full report here.
Banking’s future is often assumed to be digital. Digital banking offers speed and convenience for many, and overall cash use has declined. Yet millions of people and businesses still rely on cash and in-person banking, particularly when managing complex issues, running a small business, or when digital channels do not meet their needs.
It comes as the Government’s Access to Banking Services Review gathers evidence on how changes to in-person banking services are affecting consumers, businesses and communities. It is intended to contribute to that discussion and form part of Post Office’s submission to the Call for Evidence.
Commissioned from WPI Economics, Delivery in partnership explores how demand for cash and in-person banking services may evolve, and what role Post Office could play in supporting future access.
The findings show that demand for in-person banking is not going away. Eight in ten consumers say it is important for them to access at least one in-person banking service in future, while nearly seven in ten say it is important that these services are available within a reasonable distance of their home. Demand is particularly important for financially and digitally excluded people, those with accessibility needs, older customers, rural communities and SMEs — but it is not limited to these groups. It also found that more than half of 18–24-year-olds want in-person support for key financial decisions such as opening an account, getting advice on products or services, or applying for credit.
At the same time, access is reducing. Bank branches have more than halved over the last decade, creating a more fragmented system for customers and businesses, with less choice, longer journeys and more uneven access depending on where people live.
Post Office is already helping to bridge that gap through the everyday cash and banking services available across its network. Through the Banking Framework with banks and building societies, customers of 38 bank and building society brands can withdraw and deposit cash, deposit cheques and check balances across more than 10,000 branches offering cash services. Post Office also runs cash access counters in more than 240 Banking Hubs in partnership with Cash Access UK. Four in ten people say they use some form of personal banking service at Post Office at least once a month, and one in three say they would struggle to manage their finances without their local post office.
Future access will also need to go beyond cash alone. Consumers and SMEs want trusted face-to-face support with banking, particularly when managing more complex or higher-risk issues, dealing with difficult life moments, or running a business. While access to cash is protected through the FCA’s access to cash regime and supported by Post Office’s Banking Framework, broader in-person banking does not have the same national framework.
There is clear public appetite for Post Office to play a greater role in that future. Among those who want to continue using in-person banking services, nearly half would like to access at least one service at their local post office, while half of UK adults would like to see a larger range of banking services available locally. This points to an opportunity to build on existing infrastructure, trust and partnerships to support future access in a more consistent and sustainable way.
The Government’s Access to Banking Services Review is the moment to consider how future access can be protected in a consistent, fair and sustainable way. Delivery in partnership points to the need for a long-term, cross-industry approach — building on Post Office’s trusted high street presence, national infrastructure and existing banking partnerships, while ensuring that any future model works for customers, postmasters, banks, Government and regulators.
To take this forward, it recommends that Government should:
§ develop and agree a minimum standard of access to in-person banking services that consumers and SMEs should have in future, building on existing protections for access to cash;
§ convene a standing working group with representatives from the banking sector and Post Office to explore how those standards can best be met; and
§ review funding requirements and options for a renewed, and potentially expanded, Banking Framework post-2030, so access to cash and basic in-person banking services, should that become necessary, can be put on a sustainable, long-term footing.