On 14 June 2022, the FCA published Guidance Consultation 22/2 ‘Branch and ATM closures or conversions: Updated guidance for firms’ (GC22/2). In GC22/2 the FCA proposes to update the current guidance on branch and ATM closures or conversions (Finalised Guidance 20/3 (FG20/3) and is the latest step the FCA has taken to protect access to banking services, which includes accessing cash at branches.
From experience learnt from supervising firms against the current guidance, the FCA has found that, in some cases, firms make decisions to close branches that are still being used by significant numbers of customers. In addition, firms making decisions to remove facilities, for example, counter services, from branches or to permanently and significantly reduce the hours that branches are open. Therefore, the FCA wants to support firms in order to support customers effectively through any transitions triggered by changes to access.
The FCA is proposing updated guidance in the following areas:
- Partial closures: The FCA proposes to define a ‘partial closure’ as a long-term reduction in branch opening hours or days, or reduction in branch services, such as the removal of a counter, where this applies to a reduction in hours of internal extended hours ATMs. Additionally, the FCA proposes that the definition refer to ‘long term’ rather than ‘permanent changes’. This would capture extended periods of closure lasting six months or longer, which might otherwise be seen as temporary, such as closures due to long term building works.
- Emerging delivery models: The FCA wants firms to consider and manage the impacts on customers if their services, provided at venues, are later changed or withdrawn. Additionally, the FCA proposes to remind firms that, in the guidance they should consider whether the services that they are providing, through emerging models, meets the broad definition of a branch, meaning that the guidance applies to them with respect to a proposed closure of, or withdrawal from, the hub or venue.
- Closure analysis: The FCA proposes that, when firms are conducting analysis before deciding to close a branch, they should include usage trends and overall transaction volumes across a suitably representative period. Firms should also share details of any commercial evaluation they have completed for the FCA. Additionally, the FCA proposes to make the guidance clearer that, where a branch is identified for closure, the effective migration of services, to a channel which customers will find accessible, should be part of the pre-closure planning.
- Customer and stakeholder communications: Firms should tell customers about alternative ways to access services in the area. Firms should also consider using local networks to communicate with customers in vulnerable circumstances, such as a local carers’ group. The FCA also wants to extend the communications section of the guidance to ensure other stakeholders and local councils are also proactively contacted. Firms should also communicate with other relevant local organisations and publish a list of stakeholders that they are contacting about the plans.
- Vulnerability: The FCA wants to update FG20/3 so that it cross refers to Finalised Guidance 21/1 ‘Guidance on the fair treatment of vulnerable customers’ and reminds firms of that guidance’s relevance to firms’ conduct on branch closures and ATM conversions. The FCA proposes to add further examples to the guidance to highlight how firms can meet its expectations.
The deadline for responding to GC22/2 is 26 June 2022.