This interview originally appeared in the February edition of the NFSP SubPostmaster magazine.
NFSP Joint Members’ Editor Tim Allen speaks with Post Office Ltd Banking Director Ross Borkett about Banking Framework Agreements, Banking Hubs, cash and more
Change has been the mantra at Post Office Ltd (PO) since May last year when Nigel Railton took the reins as Interim Chair.
Under his leadership, nearly every senior figure has transitioned out, leaving room for new faces and new ideas. While those at the top focus on the need to “reverse the polarity of the Post Office,” the rest of us keep doing what we do best: serving customers.
Among the many facets of PO operations, banking has long been overshadowed by Mails. Yet, it’s a space brimming with opportunity and optimism. Growth here is tangible, underpinned by a sense of long-term vision. When I spoke with Ross, it was a chance to dive deep into a sector increasingly central to our work.
Ross’s tenure at PO spans eight years, shaped by a balance of public sector and financial services experience. In 2020, he transitioned into banking and has since been an instrumental figure in growing the Banking Hub business. Officially taking on the role of Banking Director in January 2024, Ross combines insider understanding with strategic ambition.
The Evolution of Banking Framework Agreements
Ross began by explaining the history of Banking Framework Agreements (BFAs). First introduced in 2017 under his predecessor Martin Kearsley,
BFAs were designed to simplify the complexity of managing relationships with individual banks. Instead of disparate agreements, a single, unified framework now governs banking services across PO locations.
“We’re currently operating under BF3, which provides a stable foundation for cash and banking access while strengthening our negotiating position with the banks,” Ross said. He credited the Natalie Ceeney, (Cash Access UK), 2017 report which urged the government to safeguard cash access, and which subsequently drove the Financial Conduct Authority’s (FCA) 2024 legislation. The rules now enforce standard protections for cash access, deposits and withdrawals, ensuring a consistent nationwide approach to these essential services.
Looking ahead, BF4 is set to replace BF3 in 2026. This agreement aims to offer longer-term stability, enabling better planning for postmasters. “We’re still in growth mode,” Ross emphasised. “While overall cash usage is declining, deposits through the post office network continue to rise.” He attributes this not just to bank closures but to growing customer awareness and, in some cases, a conscious return to cash.
Banking Hubs: A Rising Force
The conversation naturally turned to Banking Hubs, a concept that’s reshaping local banking landscapes. Co-created by PO and Cash Access UK the first hubs were piloted in 2020/21 at Rochford and Glasgow. These models proved there was demand for innovation, and they set the stage for the hub expansion we see today.
When asked about financial performance, Ross acknowledged that Banking Hubs currently represent a small portion of PO income. However, their value extends beyond immediate revenue. “They provide a platform for broader innovation,” he said.
“We have just passed through having 100 operational Banking Hubs” said Ross, “I see a minimum of 350 and a maximum of 500 being created nationally”. Asked to what extent they create a “have and have-nots” environment amongst the postmaster community Ross emphasised that “hubs are a banks and government decision and were going to be rolled out with, or without us so it’s far better for all concerned that PO are firmly at the heart of their management”.
“The platform that Banking Hubs have created for more innovation and development of products is a really important outcome”, explained Ross. “By having Hubs, we are now talking about things that would have been inconceivable before Banking Hubs. So, for example, credit card bill payment is now something that we have the platform to talk to the banks about and, if we can do it in a Banking Hub, we can do it across the entire network.
“We are also thinking about ‘Beyond Cash’ because it will eventually peak and come down so if we think about digitally excluded customers how do we provide for them? One answer is through post offices where an active conversation allows us to probe models where we can provide the services that are lost when banks leave town.”
I next quizzed Ross on the length of the Banking Hubs list found on Link’s website which contains 168 Banking Hubs either in-service or recommended but observed that some had been on the list since February 2022. This seems like a very long time, doesn’t it?
Once Link makes a recommendation, Cash Access UK has, under the regulations, just three months to get a cash solution live which includes finding suitable premises and negotiating a lease”. “Wow” I said. The solution is for PO to provide temporary services until such time as the permanent Banking Hub opens.
Ross said: “The industry is in a learning phase for the time being. The FCA laid down its new rules in July and gave industry until September to go live with them. The need for speed was driven, in part, by the speed at which banks were closing branches and they couldn’t afford to wait.
“It typically takes 12 months to open a Banking Hub but the length of time you’re quoting for how long some communities have been waiting illustrates just how difficult it is to sometimes find and negotiate for an appropriate building that can be repurposed as a Banking Hub.”
To conclude Ross assured me that Banking Hub management opportunities would prioritise local postmasters, with a cap of five applicants per location.
Operational Challenges and Opportunities
“Banking Hubs aren’t without their issues”, said Ross. “Customers have been overwhelmingly positive about Hubs, and this comes, more than anything else, from the service they receive from postmasters who are simply at customer service. But there are limitations in certain banking services like the current inability to pay credit card bills, and also obtain and deposit foreign currency are examples which highlight areas where improvement is needed.” Ross acknowledged the need for greater consistency among partner branch services while others lag behind.
“Our emphasis is to discuss the issues with the banks and Cash Access UK and say, ‘let us do this for you’. There’s a lot of political pressure also pressing in our favour so I’m confident we will get there.”
Cash Deposits and Withdrawals
A common problem for the customers of both Banking Hubs and post offices is caps on deposit and withdrawal limits. Be that daily, weekly, monthly or annual. Are banks being cautious because of money laundering fears, I asked, or is it part of a wider institutional desire to see cash use continue to fall?
“Money laundering is a serious issue” said Ross, “£3.5 billion passes through post offices every month and we are being targeted by criminals to launder money. When you add that to all the other cash passing through banks the FCA take this subject very seriously and has fined banks over one hundred million pounds for lapses in protocol. This, in turn, has created an atmosphere where some banks are overcompensating on deposits and are using a blunt instrument to try to solve a problem they are not solving.
“Our campaign back to the FCA and the banks tells them that they are hurting legitimate customers and businesses who need support. It’s a difficult conversation because there’s a reluctance to change, but they are not stopping money laundering, so it needs a different solution as there are other approaches and controls that could be used, for example, every bank should have a clear and functioning exception process. PO has introduced a product called “Pay-In” which is a voucher we are promoting to the banks; the voucher has a pre-authorised QR code that allows a deposit to be taken at a post office. We hope it will gain traction”.
Cash’s Place in a Digital World
Despite the rise of digital banking, cash remains a cornerstone of PO services. Ross cited its ongoing relevance for non-digital customers and small businesses, “It’s growing for us even though cash as a whole is declining. There’s no doubt it still has a future in this country for many years to come.
Merchant fees and deposit fees drive small businesses, in particular, to say, ‘we prefer cash’ and consumers respond to that.”
“Automation”, he reiterated, “is key to sustaining this growth. Every branch needs tools like note counters to handle increasing volumes efficiently. We’re working hard to make this a reality across the network, and we know every post office needs the tools to do the job properly.
“Hopefully at Easter time, we will be able to make an announcement that fixes this. We are doing our absolute best on this issue.”
The Bigger Picture
“As the conversation wound down, I asked Ross whether PO might reintroduce current accounts for the public and small to medium-sized enterprises (SME). Whilst they have existed in the past e.g. Bank of Ireland from 2013 to 2019 and GiroBank way back, surely, I said, the closure of 1,596 bank branches in recent years creates the opportunity for PO to become a major force in banking if a great internet model is combined with a high street presence through our post offices? “This isn’t on our radar right now”, said Ross. “We don’t have a banking license which means we would have to partner with a bank and split the proceeds.
Lending is how banks make money to fund deposits but that’s a challenging model and it’s important to recognise that the Banking Framework Agreements work well because we are not trying to take customers away from the very banks we are working with. Our clear opportunity is to maximise cash and that’s what we must focus on while traditional bank branches continue to close. Cash has an incredible focus on it up to and including parliament and we have to get this right.”
However, Ross expressed enthusiasm for exploring new opportunities, “The Bank of England have a program around the digital pound, and we are looking at how we can be involved in a central bank digital currency. These are exciting and innovative opportunities in new areas.”
Asked if postmasters can seize their own banking initiatives, Ross recalled “We came out to postmasters through Branch Hub using a program called My Retail Space to say postmasters are at absolute liberty to hire out space in their branches to individual banks to provide Pop-Up branches. Use Branch Hub to tell PO you have space, and they will share that list with the banks and Cash Access UK. We’ve previously mentioned it, but I’ll do something about getting the word out again.”
“We have exciting years ahead,” Ross concluded. “Our message is clear: if you need cash, come to us. This is our chance to solidify our role in the banking ecosystem while delivering more for postmasters.”
The Strategic Review should be the catalyst for an awful lot of mending at PO but the saying ‘If it isn’t broken, don’t fix it’ seems well worth applying to Ross’s vision for the future of banking at PO.