The Financial Conduct Authority has issued a statement in response to MPs' concerns about the decline of face-to-face banking services and the risk of communities being left without bank branches. The statement comes ahead of an independent review into access to banking services, which is due to report to the Government in October 2026.
During a parliamentary debate, MPs highlighted the impact of bank branch closures on local communities. Caroline Voaden, MP for South Devon, led the discussion, stating that bank services in rural areas have been "decimated." David Reed, MP for Exmouth and Exeter East, described how the seaside town of Budleigh had been left struggling as "every major bank" had left. He noted that the location has a tourist economy, but when people come there for a break, there is "no access to cash whatsoever."
Banking hubs rules under scrutiny
Ms Voaden said: "We have two banking hubs in my constituency, opened before the rules were tightened." She explained that prior to September 2024, the rules for deciding if a banking hub was to be opened were "much broader" and that now the criteria are "far too narrow," with the focus "solely on access to cash" rather than the other reasons you may need to use a bank.
The FCA spokesperson said: "Appropriate access to banking services is important. Parliament gave us powers to protect access to cash, not wider banking services." They added: "In response, we required banks and building societies to fill gaps in cash access, including through banking hubs with the 250th due soon."
Ongoing review and next steps
The FCA said: "We've made sure local communities can ask for an assessment and challenge the outcome if they believe their local needs are not being met. We look forward to supporting the Government's wider review of access to banking services."
An independent access to banking services review is currently underway. This study is looking at "the current trajectory of access to in-person banking services" and how much services have declined for customers. The group is expected to present its final report and recommendations to the Labour Party Government in October 2026. Ministers will then publish the report for the wider public to see.
