How to support customers who rely on cash services for everyday needs

According to the Access to Cash Review¹ between five and eight million people in the UK relied on cash for their everyday needs. These figures include those on lower incomes, the elderly, the vulnerable and those unable to access or use digital services. An additional 1.3 million people do not have a bank account with the vast majority on low incomes.²

The decline in the use of cash threatens to leave these individuals even further behind in an increasingly digital world. This trend has been accelerated during the pandemic with current cash usage 35% below pre-COVID-19 levels. As society shifts to this cashless reality, there is a real risk that many individuals and small businesses that need to deposit and withdraw cash will suffer. 

In 2020, the UK government announced they would launch a consultation into how access to cash could be maintained.³ Further to this, UK Finance, representing the UK banking industry, established the Cash Action Group (CAG) to proactively find potential recommendations to this issue. The group was chaired by Natalie Ceeney CBE, author of the 2019 Access to Cash Review⁴ and long-term advocate of the need to preserve cash services for those who need them. The group appointed EY UK to support the development of an industry-wide service.

We helped the CAG to provide a clear and decisive strategy that directly helps millions of customers and SMEs. We worked alongside some of the leading UK banks and others involved in the cash infrastructure – such as the cash-machine network LINK and the Post Office. Input was also sought from a wide range of stakeholders, including consumer groups that represented the needs of cash-dependent people, regulatory bodies and Her Majesty's Treasury (HMT). Our team’s previous experience of working for UK Finance’s SME Taskforce helped ensure we understood the importance of regular communication, consulting widely and incorporating views from all stakeholders into the final recommendation.

Our initial efforts focused on presenting possible options to improve the accessibility of the cash infrastructure and a model was developed to ensure cash services would be deployed in communities where it was needed.

Under this new model, any community that faces the closure of a core cash service – such as a bank branch or ATM – will have its needs independently assessed by LINK, which will determine whether a service is required and what would be the most appropriate. Potential service options include cashback without purchase, an ATM, an enhanced Post Office or shared banking hub. 

We applied our experience of working with the UK banking industry and leveraged our regulatory insights into what would be suitable, working closely with the group to refine the model and seek consensus. 

As CAG chair Natalie Ceeney explains, “What stood out was the EY UK team’s experience in working collaboratively to tackle an industry problem. The ability to help build a consensus and provide first-class consultancy support to the central team was invaluable. The EY teams were also critical in using their deep regulatory insights to help ensure the optimum outcome for banks and customers.”

Key to the service’s success was a collaborative ecosystem built on mutual understanding, trust and open communication, achieved initially in a virtual working environment during a global pandemic. Our experience and adaptability allowed us to work seamlessly with UK Finance, offering a huge level of flexibility as the programme rapidly evolved. We also helped ensure proposals had political and regulatory backing and support from consumer groups and other key stakeholders.

The UK banking industry now has a practical and sustainable framework that will act as a bridge to the future and protect access to cash and cash services for those who need them.⁵ Retail customers will be able to continue to access cash services and SMEs will be able to continue to deposit cash. It also positively impacts many local communities, which will benefit from continued cash services. 

One of the key new initiatives is the launch of a shared banking hub, a truly innovative concept that will, over time, change the make-up of the UK high street. A typical hub consists of two core components. The first is a counter service that will initially be run by the Post Office, helping customers to make basic cash transactions. The second component is access to personal assistance with cash-related services such as making a payment, paying a bill or signposting customers to other sources of help. Additionally, a shared banking hub can also increase footfall, add vibrancy to a community and provide a boost to the local economy. 

The service also benefits the banking industry. The new service is a sustainable model that allows banks to continue serving cash-dependent consumers whilst continuing to meet most customers’ demands for more digital products and services.  

As UK Finance Managing Director of Personal Finance Eric Leenders explains, “Everyday banking is about everyday solutions and, for millions of people, cash is very much a part of how they manage their money from day-to-day. EY UK’s deep understanding – and support of – the key aspects of financial inclusion have been an implicit strength that has positioned the sector well for the incoming regulatory principle of delivering good outcomes – and forthcoming cash regulation.”

We worked collaboratively with UK Finance and its CAG, consumer groups and the UK banking industry to help deliver an outcome that meets all those needs. This project has helped ensure improved access to cash for a significant number of communities, consumers and small businesses across the UK.