Natalie Ceeney, the country's leading authority on the damage done to communities when banks and cash machines close, says the Government and regulator have just 'months left' to introduce rules that will safeguard nationwide access to cash.
Failure to act swiftly, she says, will leave hundreds of communities up and down the country facing an uncertain future.
Deprived of services that allow residents and local businesses to readily access and deposit cash, she fears many will become wastelands as shoppers go elsewhere and retailers close.
Passionate: Banking expert Natalie Ceeney says 'banking hubs' are the answer to the increasing number of closures of high street branches
Ceeney believes 'urgent action' is needed because of an impending wave of branch and ATM closures in the coming months as banks shrink their high street presence.
These closures are primarily in response to a customer shift towards online and mobile banking, a trend accentuated by the lockdowns of the past year.
Last month, Santander said it would shut 111 branches by the end of August while TSB is still working its way through a programme announced in September that will see more than 160 branches axed from its network. HSBC is also axing 82 branches.
Some experts believe 40 per cent of bank branches nationwide could close by the end of the year.
Ceeney argues that some of these doomed branches – and others being shut by rival banks – should not be left empty. Instead, they should be swiftly converted into 'banking hubs' that offer basic banking services to customers of all the country's main banks.
Such a shared branch idea – first put forward in the late 1990s by the now disbanded Campaign for Community Banking Services – is one that The Mail on Sunday has championed for many years.
The banking hubs would allow customers – both personal and business – of all banks to deposit and withdraw cash, as well as deposit cheques. They would give customers a chance (on certain days) to meet a representative of their own bank to discuss a financial issue – as well as allow people to open accounts.
The Post Office-branded hub in Rochford opened five days ago in a former carpet shop
'Such hubs would breathe life back into struggling communities,' Ceeney enthusiastically told The Mail on Sunday late last week. They would be run by the Post Office.
But without regulatory backing for such an idea, she believes the banks would be nervous about getting behind it. Their main worry is falling foul of competition laws by being seen to be working in collusion.
To compound matters, the Government has yet to introduce legislation to safeguard access to cash, despite a pre-pandemic promise to do so. Any legislation would add pressure on all parties – regulators and banks – to come up with access to cash solutions.
Ceeney, author of a ground-breaking report two years ago on access to cash, spoke to The Mail on Sunday as the green light was given for the launch of eight cash pilot schemes across the country.
These community access to cash pilots are an initiative backed by leading banks, consumer groups and small businesses – and are overseen by a board chaired by Ceeney.
The idea is to test new ways of making cash available in communities. These include allowing people to get cashback from local shops through new means such as pre-ordering it on an app; improving post office facilities; and introducing free-to-use cash machines in communities that previously did not have access to one.
Last month, Santander said it would shut 111 branches by the end of August
Two of the pilot schemes – in Cambuslang, South Lanarkshire, and Rochford, Essex – are trialling the banking hub model that Ceeney passionately believes could transform many community high streets. A third was to be tested in Ampthill, Bedfordshire, but suitable premises could not be found, so the pilot was shelved.
Separately, as we report here, Lord Holmes of Richmond is hoping tomorrow to put pressure on the Government to introduce legislation that would allow retailers to offer cashback without customers having to buy something first.
All eight pilots went live in the past few days, but are scheduled to run for just six months because of the limited funding made available to them. This small window is one of the main reasons why Ceeney is keen to get the regulators and Government onside so that if the banking hubs prove popular, they could be quickly rolled out nationwide.
The Post Office-branded hub in Rochford opened five days ago in a former carpet shop. As a director of Rochford Financial Centre, George Ioannou has been instrumental in getting the project off the ground. Rochford no longer has any banks – Barclays was the last to leave in 2017 – and one of its two cash machines is fee-charging.
'It's taken 12 long months to get the hub operational,' says George, a former director at an American ratings agency, who has lived in the town for the past 30 years. 'And of course lockdowns haven't helped.'
The hub provides a free-to-use ATM and an automated deposit machine that allows personal customers and businesses to bank cash and cheques. There is also a post office counter where people can do personal banking – it doesn't sell stamps.
Then, on each day of the working week, two representatives from one of five banks (Barclays, HSBC, Lloyds, NatWest and Santander) come to help customers who want to discuss specific financial issues – or open an account.
'We had 70 people in on Tuesday, then 50 the following day,' says George. We're delighted with the positive reaction the hub has received from local businesses and the broader community.'
Aware that the shared branch has probably only three months to prove to the banks and the Post Office that it is a viable operation, George says he will 'move heaven and earth' to ensure it is a success. He adds: 'Either the community uses it or we will lose it.'
On Ceeney's wish to have a national rollout of such hubs, he is four square behind it, especially in towns like Rochford, where all the banks have gone. The hubs, he believes, could help stimulate local businesses and local communities battered hard by lockdowns.
Derek French, a former retail banking executive, founded the Campaign for Community Banking Services in 1998. He championed shared bank branches, but after similar trials to those being conducted in Rochford and Cambuslang, the banks refused to back the idea.
Given this bitter experience, he is understandably sceptical about Ceeney's grand vision of a national network of banking hubs.
On Friday, he told The Mail on Sunday: 'The cash pilots are ill timed, look like a random assortment of ideas, and the fact that only two hubs are being tested suggests the banks are lukewarm about the idea. I fear the pilots have been set up to fail.'
Martin Kearsley, director of banking at the Post Office, also appeared to downplay the banking hubs. He said: 'While they offer much promise, they are not a solution to this [access to cash] problem in isolation. Post Office branches provide critical cash deposit and withdrawal services for millions of personal and business customers every week.
'There must be a continued obligation on retail banks to provide access to cash withdrawal services free at the point of service for both consumers and businesses across the country.'