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Banks: Competition

Question for Treasury

UIN HL15692, tabled on 13 May 2019

To ask Her Majesty's Government what plans they have, if any, to update competition law to allow for shared banking hubs in areas where local bank branches have been closed.

Answered on

22 May 2019

Branch closures can be difficult for the communities affected and the Government pays close attention to this issue. However, the decision to close a branch is a commercial one for a firm, and Government does not intervene in those decisions.

However, the Government is equally clear that as banking providers seek to respond to technological advances and changes in customer behaviour, they must also consider carefully the needs of those who still rely on their local bank branch. Since May 2017, the major high street banks have been signed up to the Access to Banking Standard, which commits them to work with customers and communities to minimise the impact of branch closures and put in place alternative banking services.

The Government also supports the Post Office Banking Framework Agreement which enables 99% of the UK’s personal and 95% of the UK’s small business customers to withdraw money, deposit cash and cheques and check balances at any one of the Post Office’s network of 11,500 branches.

While banks do have to comply with competition law, there is no specific regulation that prevents banks from sharing branches or other premises where their strategies align. The Government therefore has no plans to update competition law on this basis. Government does not intervene in these commercial decisions, but will continue to encourage banks to think creatively about how they can ensure that consumers can access a wide range of banking services on a sustainable basis. For example, NatWest, Lloyds Bank and Barclays are trialling shared business banking hubs in 6 locations across the UK in the coming weeks.

Answered by

Treasury