UK focuses on access to banking services

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As the UK moves towards its recovery from the COVID-19 pandemic, a recent report by Her Majesty’s Treasury and the UK Department for Work and Pensions (DWP) has set out measures that will help build financial inclusion and capacity for more people in the country.

According to the report, the measures will help people move beyond “the basic need to be able to open their first bank account, to access credit, insurance and the right mortgage products at an affordable price, and when retirement planning”.

Access to banking services is one of the key areas highlighted in the publication to promote financial inclusion. Indeed, “the government recognizes that most people in the UK primarily interact with financial services and products through their bank, from budgeting their monthly salary to managing their mortgage or credit card payments,” says The report.

The report found that during the pandemic an increasing number of customers switched to digital banking methods and relied less on access to a physical bank branch, with 83% of UK adults using contactless payments, 72% using banking services online and 54% using mobile banking. in 2020.

“This growing use of a broader set of banking channels rather than just a traditional bank branch means that more consumers and businesses than ever are taking advantage of the convenience, security and speed of online banking. and by telephone,” the report added.

But as the pandemic has accelerated the shift to digital channels and huge numbers of customers have started using online banking for the first time, some people – especially those who may be vulnerable or digitally excluded – may still need access to a local physical agency.

“Although the government does not intervene in commercial decision-making, it believes that the impact of branch closures must be carefully understood and – where possible – mitigated so that all consumers can access banking services from over-the-counter,” the report said.

He added that banks and building societies will need to balance customer interests and business factors when making decisions about the size and shape of their branch networks.

This is why in 2017 the government signed an agreement with major high street banks known as the Access to Banking Standard, obliging these institutions to keep their customers informed about branch closures and options alternative banking options available to them.

To further ensure the availability of banking services for all, the Financial Conduct Authority (FCA) has issued guidance for companies considering a reduction in their physical branches or the number of free ATMs in September 2020, with the obligation to “consider possible alternative terms of access and communicate any changes to their customers” when a branch closure is planned.

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As well as access to banking services, the report also highlighted measures taken to facilitate access to cash, which remains the second most used means of payment in the UK and accounts for almost a fifth (17% ) of the total number of payments made in the UK. 2020.

Given its popularity, the government has pledged to legislate to “protect cash in the future” and ensure that the country’s cash infrastructure remains sustainable over the long term, including supporting the widespread supply of cash. cashback without purchase from stores and businesses.

Developing a strong FinTech ecosystem is also at the top of the financial inclusion agenda; earlier this year, the government announced the introduction of a new “large-scale” visa stream in the spring of 2022 to attract global talent and boost the country’s FinTech workforce.

Additionally, a commitment to provide £5 million ($6.6 million) in seed funding for the creation of a new Finance, Innovation and Technology Center (CFIT) is another way the government is helping to support the wider FinTech sector.

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