How banking hubs are fostering financial inclusion

An inventive pilot scheme has restored banks to neglected high streets around the UK, but it’s due to end soon. Can the communities involved cling on to the change?


One of Community Access to Cash’s pilot banking hubs in Rochford in April this year
One of Community Access to Cash’s pilot banking hubs in Rochford in April this year

We’ve all felt the agony of suddenly finding that we have no cash, whether it’s for the takeaway delivery driver waiting at the door or a birthday card in need of a crisp £20. But a lack of cash can prove fatal to a business. For all the payment technologies that are propelling us towards a cashless future, readies still rule on the high street.

A survey published by Which? magazine in January 2021 indicated that more than 2.5 million people in the UK still relied primarily on cash, while well over a third of the adult population viewed it as an essential back-up to other payment methods. Despite this, Which? also found that 13,000 cash machines had vanished over the preceding three years, while 4,300 bank branches had closed since 2015.

Combined with the Covid crisis, this factor has contributed to a sharp reduction in footfall on many high streets. The loss of all bank branches from Cambuslang, Lanarkshire, in 2018 left shoppers and retailers alike facing inconvenient trips to Glasgow or neighbouring towns where banks still had a presence to obtain or deposit cash, where they would inevitably encounter long queues. 

The absence of local banking facilities was also a security headache. Donna Stevenson, owner of The Loft therapy centre, agonised about whether to take her business’s daily takings home with her or leave the money on the premises overnight, while Angeline Coyle, owner of The Tea Bay café, suddenly found that she had a 90-minute round trip just to make a deposit.

“We had a TSB, an RBS and a Bank of Scotland branch here, but they all disappeared. There was a post office, but it was in an unpleasant place,” Coyle recalls. “Suddenly, I couldn’t just send my mum over the way with the takings. So, for me to reach the nearest bank [three miles away in Rutherglen], I had to pay someone to cover my absence from the shop. Losing the banks created cost, hassle and a security risk for us.”

Pilot flies to the rescue of cash-strapped businesses

Into the breach stepped Community Access To Cash Pilots (CACP), an independent initiative backed by a range of parties, including banks, the Federation of Small Businesses and a consumer-rights group called Fairer Finance. Launched in December 2020, it’s taken the form of eight locally led networks, scattered widely around the UK, providing free cash-withdrawal facilities and other banking services, including business advice. Their success to date shows how banks can continue to serve the nation’s high streets if they’re prepared to cooperate with their rivals and the communities they serve.

Cambuslang, one of the pilot towns, opened a hub that’s shared by five banks. Instead of each running their own commercially unsuccessful unit, they use the same premises in turn for one day a week. The site is run by a husband-and-wife team who know the local clientele well and understand their particular needs.

These pilots have been a success by combining the latest technology with local knowledge, according to CACP’s strategic leader, Chris Ashton. 

“A high-street bank understands the local populace. In replacing that, you need to find that same level of knowledge. You cannot simply apply the same solution across every town; you let the town take the lead,” he says. “For instance, in Rochford, Essex, we found an appropriate local leader with local knowledge and gave him a budget to market the town’s pilot to ensure that it reached the right people.”

 Losing the banks created cost, hassle and a security risk

In other pilot towns, debt-relief charities such as Number 11 were invited to help get the word out and advise on how the lack of access to cash had affected local consumers and businesses. Trust was vitial to the project, Ashton says, particularly for people who’d been obliged to pay £1.99 at an ATM every time they wanted to withdraw cash – something that not only dented weekly budgets but also prompted people to withdrew more than they needed, increasing the risk of theft.

“Locals would ask us: ‘Are you going to be here for the long term or are you just here to make it look as though the banks are doing something?’ We can never put 20 new branches on the high street, but we have helped to form a template from which banks can work pragmatically to create something useful for communities,” he says. “It shows that cash is not doomed.”

Local measures work only with national solutions

Elsewhere, CACP has encouraged small shops to offer cashback on debit-card transactions – something that’s encouraged footfall and kept money circulating – with localised mobile apps indicating which stores are offering the services at any one time. The Shrap app has also enabled shoppers in isolated communities to take any change from cash purchases in local stores as digital currency that they can spend elsewhere, meaning that these businesses also got to keep coins in their tills.

Lloyds, a participating bank in Cambuslang and Rochford, even created a ‘trusted persons card’. This enables the user to grant a relative or friend the ability to obtain cash or make a payment on their behalf in a secure way. 

But other high streets around the country are getting left behind. The Lloyds Banking Group has announced 100 branch closures this year alone, for instance. This means that CACP is being undermined by the fact that so many other small towns are losing their banks, according to Gareth Shaw, head of Which? magazine’s money section.

“A patchwork of disjointed schemes will not be enough to support those being left behind by the transition to digital banking,” he argues. “It’s vital that the government legislates to support the millions of people who rely on cash. Given the alarming rate at which branches and ATMs are closing, this can’t happen quickly enough.”

A patchwork of disjointed schemes will not be enough to support those being left behind by the transition to digital banking

CACP is at pains to stress on its website the schemes are “pilots, and not permanent new services”. They were originally due to close after six months in operation, but they have been extended to at least October. 

It adds that all of the parties involved in sponsoring the initiative “are keen to find solutions that can be rolled out nationally, but whether or not they are will depend on a variety of factors, including how successful the pilots are”.

In Cambuslang, Angeline Coyle is in no doubt that the shared banking hub has been a success. During the Covid crisis, it has provided crucial life support for the high street.

“With no bank in the town, people had stopped visiting the high street at all. They had no reason to do so,” she says. “Now people not only come in; they also have cash in their pockets and so are more likely to buy a cup of tea and cake here when they collect their pensions.”