News, Culture & Society

Britain will soon become a cashless society leaving vulnerable people at risk

By Nicky Morgan MP 

Many consumers, particularly the vulnerable, still struggle to access basic financial services. 

Members of the Treasury select committee launched an inquiry into this issue last year, during which we heard from consumer groups, charities, banks, and the regulators.

It’s clear that despite the changing nature of banking with a move towards digital, many people still rely on bank branches. 

Data from the House of Commons Library shows that in the 30 years to 2012 the number of branches fell from 20,000 to 8,000.

More recent estimates suggest that on average two bank branches a day closed in 2018, leaving some communities with no access to basic financial services at all – an issue on which the Mail has long-campaigned.

Vulnerable people, such as the elderly or those on lower incomes, are more likely to be impacted by closures. 

Such groups often rely on branches to carry out their banking needs so a network must be preserved to avoid financial exclusion.

Banks often peddle the line that, with their branches closing, customers can use the basic banking services provided by the Post Office, which does so at a loss.

The Post Office is owned by the Government. Taxpayers should not be subsidising the banks’ lack of branches. 

The Government must ensure that the Post Office receives adequate funding from banks for the services it provides on their behalf.

In the ‘last bank in town’ cases banks should be required to provide and fund banking hubs with adequately-trained staff within the local Post Office or a shop floor space. 

As interactions with banks are increasingly digitalised, vulnerable consumers cannot be left behind.

The importance of financial inclusion cannot be over-stated. As the World Bank said recently, there can be no end to poverty without financial inclusion.

And, as Eleanor Southwood, chairman of the Royal National Institute of Blind People, told members of the Commons Treasury committee, financial inclusion is about independence, protection from financial abuse and confidence.

The financial inclusion of vulnerable consumers – and we can all be vulnerable at some point in our lives – should be of the utmost priority for financial services providers, the Government, and financial regulators.

It can no longer be an option for banks to ignore financial inclusion.