News

MPs say banks should fund shared hubs for personal customers

The UK’s Treasury Select Committee says that the country’s big banks should be compelled to fund shared hubs to prevent the loss of the ‘last bank in town’.

In a wide-ranging report on financial inclusion, MPs have taken aim at the trend towards bank branch closures in towns across Britain.

The Select Committee is not convinced by the bank shift to digital services, noting that many people still rely on bank branches and that online and mobile provision has proved vulnerable to IT failures.

It points out that many banks are ushering customers towards Government-owned Post Offices, which provide basic banking services as a loss-making enterprise.

“Taxpayers should not be subsidising the big six banks’ lack of branches,” says the Committee. “The Government must ensure that the Post Office receives adequate funding from banks for the services it provides on their behalf.”

The report points out that The Post Office is not an optimum environment for customers, particularly vulnerable ones, for banking services as staff are typically not banking specialists. Rather, the service provided is comparable to that of an ATM.

Three of the UK’s biggest banks, Lloyds, NatWest and Barclays, have already banded together to open shared hubs in six major cities for the provision of business banking services.

Similar arrangements should apply for personal banking services, MPs believe, suggesting that banks take turns to supply staff to the Post Office network to deal with urgent queries and provide help with non-routine services, such as setting up direct debits.

“The Post Office should not be seen as a replacement for a bank branches, but a complimentary proposition where available,” the report states. “In cases where the ‘last bank in town’ is due to close, banks should be required to provide and fund ‘banking hubs’ in the local Post Office, with adequately trained staff.”