Which? is urging banks to prove they can take action to stop people from losing access to cash and valued bank services - or put an immediate pause on bank branch closures until legislation kicks in to protect the fragile cash network.
It comes as our latest analysis reveals the rate of bank branch closures has surged with 736 branches shutting their doors this year, and over 220 already lined up for closure in 2022.
Which? is concerned that banks may be rushing to close branches before solutions to protect vital access to cash can take effect.
Bank branch closures are accelerating
Bank branch closures make it harder for people to access their cash for free.
Our latest analysis found there have been 736 branch closures this year - an average of 61 a month.
This represents a 17% rise compared to the rate of closures in the previous six years when an average of 52 branches were closing a month.
The table below sets out the number of branches that have shut their doors each month this year. You'll see 2021 closures peaked in the summer when a staggering 298 closed between June and August - an average of 99 per month.
|Month||Number of bank branch closures in 2021|
Source: Which? analysis of bank branch closure announcements and data sourced directly from banks. There are no scheduled bank branch closures for December.
Since 2015 banks have closed 4,514 branches. But banks aren't done with reducing their networks yet.
Barclays, Halifax, HSBC, Lloyds, Natwest, Virgin Money and TSB have all announced branch closures for 2022.
Which? analysis estimates 221 are due to close next year.
The table below set out how many branches are closing per bank.
|Bank||2022 scheduled closures|
*Update: this table originally stated that Yorkshire Building Society was planning to close 17 branches. This was not correct and should have referred to Yorkshire Bank. We have updated the table to reflect that Yorkshire Bank and Clydesdale Bank are part of the Virgin Money brand and Virgin Money plan to close 30 branches in 2022.
Banks say they have been driven by an increase in online and mobile banking, and a rapid decline in the use of physical branches.
The most recent figures from UK Finance, the banking association, show two-thirds of adults (72%) used online banking and over half (54%) used mobile banking in 2020.
However, there are still plenty of people and small businesses that rely on local banks and the services they offer.
UK Finance's Access to Cash Action Group (CAG) is set to outline measures to address the country's access to cash crisis.
However, we are concerned that the group's proposals will be undermined by the decisions of individual banks to close branches before solutions can take effect.
Which? CEO Anabel Hoult has written to banks that sit on the CAG warning that the rate of bank branch closures 'seriously undermines' industry efforts to address dwindling cash access.
We've also written to banks that are not members of the CAG, asking them to provide clarity around the steps they're taking to support customers who're negatively affected by widespread bank closures, and to provide detail on their upcoming branch closure programmes.
The CAG letter outlines Which?'s expectations that any closures should be subject to greater scrutiny than is currently required.
Specifically whenever a decision to close a bank branch is made:
If banks cannot meet these commitments, then we believe they should pause their branch closures until they can or until legislation to protect access to cash has been rolled out.
When will cash legislation kick in?
However, shortly after the country was forced into lockdown when the coronavirus pandemic struck and some businesses limited the use of cash - damaging an already fragile system.
In July this year, the Treasury finally launched a on how cash legislation could work, including proposals to make the Financial Conduct Authority (FCA) the lead regulator for ensuring that people can continue to withdraw cash locally, which includes powers to hold the banking industry accountable if further decline of the cash network would put access under threat.
This consultation closed in September, however, the findings have not yet been published. The Treasury said it couldn't give us specific timings of when to expect this but said it was considering the responses.
Which? is calling on the government to urgently press ahead with this long-promised legislation.
Anabel Hoult, Which? Chief Executive, said: 'The alarming acceleration of bank branch closures has left many people who depend on them for essential banking services at risk of being cut adrift, which seems to fly in the face of work being done across the industry to protect access to cash.
'While many people can now bank digitally, millions of people are not yet ready or able to do so. Greater scrutiny of branch closures must be in place to ensure that people who rely on cash can access it.
'We are calling on banks to pause any programme of branch closures until proposals to protect access to cash are rolled out. The government must also urgently press ahead with long-promised legislation that guarantees consumers can continue to access cash for as long as it is needed.'
This story has been updated since it was first published. We originally stated that Yorkshire Building Society was planning to close 17 branches. This was not correct and should have referred to Yorkshire Bank. We have updated the piece to reflect that Yorkshire Bank and Clydesdale Bank are part of the Virgin Money brand and Virgin Money plan to close 30 branches in 2022. This also means that the number of branches set to close in 2022 had to be revised up from 220 to 221.