Official Report: Minutes of Evidence

The Chairperson (Mr O'Toole): I ask Cat to give us a brief opening statement if possible. Hi, Cat, thank you for joining us.

Ms Cat Farrow (Cash Access UK): Good afternoon, Chair.

The Chairperson (Mr O'Toole): Please go ahead.

Ms Farrow: Thank you, Chair, and good afternoon, Committee members. Thank you for inviting me to join you. Cash Access is UK is a not-for-profit company that is owned by 10 UK banks.

We have been up and running for about two years now. We started on a voluntary basis, and our activity is now largely governed by the regulations that came in recently under the Financial Services and Markets Act 2023, which protects access to cash across the UK. Cash Access UK provides access to cash and basic banking services in communities right across the UK. At the moment, 167 hubs have been recommended. Of those, 87 are open — there are 66 in England, 12 in Scotland, three in Northern Ireland and six in Wales — so we are making rapid progress in deploying new shared services.

For those Committee members who have not had the opportunity to visit one yet, a banking hub is a shared banking space with a counter where customers of any major bank can carry out cash transactions. The banks with the most customers in an area take it in turn to send a community banker to customers so that they can have a conversation with their own bank face to face and in person about slightly more complex issues. It is that combination of cash transactions, access to cash and access to those basic banking services that we are introducing into communities.

So far, we have had incredibly positive feedback from the communities where we have deployed a banking hub. We are finding that they really support not only the more vulnerable members of the community who rely on cash but those people who want to go in for whatever reason or because they have a complex task and really need to speak to someone in their bank face to face. We are also starting to see, as you suggested with the previous witnesses, a bit of a halo effect. The hubs are anchor units on the high street. We have had feedback from small businesses saying that the hubs really provide a valuable service to them, drive footfall and provide the community service that you have just been talking about.

Kilkeel is the —.

The Chairperson (Mr O'Toole): I have not seen a banking hub yet, Cat, so just explain them for people who are watching. In Northern Ireland, people will be used to seeing Bank of Ireland or Ulster Bank, or it could be Santander or Lloyds if they too exist here. They are not seeing those, so are the hubs just labelled in big letters, "Banking Hub" without a brand name?

Ms Farrow: Yes. They are bricks and mortar in a central high street location. It has the 'Banking Hub' fascia and the Post Office logo because the Post Office provides the cash services. The Post Office provides those services because it is the only organisation that is able to complete multi-bank transactions. The Post Office is our supplier, and it provides the banking hub operator, which runs the service. The banks then send a representative to the hubs from Monday to Friday, taking it in turns.

The Chairperson (Mr O'Toole): Is it arranged in a way that means that, for example, the Bank of Ireland comes on Monday and Santander comes on Tuesday and so forth?

Ms Farrow: Yes, that is exactly what it is like.

The Chairperson (Mr O'Toole): Sorry, please go on.

Ms Farrow: I was going to mention that the interesting thing that we have observed about the Kilkeel hub, which has been open for a little while now, is a relatively high proportion of business transactions that are above the national average in volume and number. It is good to see that businesses in Kilkeel are making the most of the banking hub.

The Warrenpoint and Portrush hubs have only just opened. My colleagues were over there yesterday and are there today for the official openings. It will be interesting to see how local residents and small businesses will use those hubs. Of course, we do not yet know how the hubs that are yet to come will perform, but they are, as you say, due to be in place before Christmas.

The Chairperson (Mr O'Toole): Which hubs are going to be in before Christmas? Those in Comber and Newcastle?

Ms Farrow: Comber and Newcastle, yes.

The Chairperson (Mr O'Toole): Cash Access UK is effectively an industry that is coming together. Does it act as a secretariat to run the hubs, or what form do you take? You are a company that is limited by guarantee with all the banks and shareholders — is that right?

Ms Farrow: That is right. We are an independent company, so we are independent, not for profit and limited by guarantee. We have an independent chair and bank representatives on our board, but we also have independent board directors. Although we are completely funded and owned by the major banks, we have that degree of independence in the way that we are constituted, which is important.

The Chairperson (Mr O'Toole): What regulatory or oversight relationship do you have with the Financial Conduct Authority (FCA), for example?

Ms Farrow: We have regular interaction with the FCA. The FCA has been very close in the journey right from the beginning. We started this provision on a voluntary basis to prepare for the regulations to come in. If we had waited, there would not have been any means for the banks to share services beyond ATMs. We did that voluntary scheme in the first place to try to get the provision moving and to get it up and running in preparation for the regulations. We are not regulated by the FCA or by anybody, because we are the delivery body. LINK, as the decision maker, is regulated by the FCA in its decision-making capacity, but we have very close relationships with the FCA. We meet it monthly, and it has a good understanding of the work that we are doing.

The Chairperson (Mr O'Toole): The FCA does not regulate you because you are not a bank or a financial services provider, but you are an organisation that helps to provide the service.

Ms Farrow: That is it, yes.

The Chairperson (Mr O'Toole): What projection was made of the demand for particular services? I presume that there must be some monitoring of the level of uptake or of how busy individual hubs are.

Ms Farrow: We are gathering increasing amounts of data and insight now. We have more hubs open, and, as you would expect, the usage varies enormously between communities, ranging from mid-40s average footfall right up to about 350. So it really does vary across the country and across the nations of the UK.

Our forecasting is a reactive model. Hubs are deployed on the back of branch closures, as the Committee is probably aware. They could also be deployed on the back of a community request. That is a really important feature of the model whereby anybody with an interest in access to cash in a community can ask LINK to carry out a cash assessment of their town, and LINK can then make a recommendation that is based on what it finds. Hubs can be deployed in two ways, and we base our forecasts for the future on past experience, including past run rates, past branch closures and the number of community requests that we have started to see since the model has been up and running. We are still in the relatively early stages of gathering that data and insight on usage, but we have a good footprint now, with 87 hubs open. We are starting to gather that information quite effectively now.

The Chairperson (Mr O'Toole): How much data do you have on the performance of the Northern Ireland hubs and how they are doing?

Ms Farrow: Kilkeel is the hub that has been up and running in Northern Ireland for a fair time now. It is one of our quieter hubs compared with other banking hubs across the UK, but, bearing in mind that Kilkeel is a relatively small place and, obviously, serves a catchment area —.

The Chairperson (Mr O'Toole): Careful what you say. There is a very proud Kilkeel person on our Committee.

Ms Farrow: I am so sorry. I am thinking about size in comparison with the likes of Acton in west London or Knaresborough. Kilkeel is smaller than those places, so you would expect it to have a lower average daily footfall. As I said, the really interesting thing is the extent to which local businesses have taken up the opportunity to use the banking hub in Kilkeel, and it is significantly above the national average for use by businesses, which I think is really interesting. It will be interesting to see whether we see that reflected in Warrenpoint and Portrush as well.

The Chairperson (Mr O'Toole): Kilkeel is above the UK average for business usage.

Ms Farrow: Yes.

The Chairperson (Mr O'Toole): Is it below the average for consumer usage?

Ms Farrow: It is, yes. That is right. We want to look into why that is and at whether there is more that we can do to encourage local residents and local consumers to use the banking hub. We want to delve a little more into why that might be.

The Chairperson (Mr O'Toole): I will open it up now to colleagues, starting with Diane, the Deputy Chair.

Ms Forsythe: Thanks, Cat, for coming on. I live in Kilkeel. It is my home town, and I represent South Down. We were very proud to have the first banking hub in Northern Ireland. Warrenpoint and Newcastle are also in my area, which is quite rural. The Kilkeel hub is a very welcome after a number of banks closed in close time to one another. The post office closed as well. Down at the back of a couple of our smaller supermarkets was the post office queue, where there was not a lot of privacy, so the hub has been very welcome in Kilkeel. I think that a lot of people did not really understand what the hub was going to look like and what it meant, so it is good to get that visual out there, as people are looking to the hubs and at what it means for them. It is not necessarily what people were looking for. What you say is definitely my understanding of it.

Our rural businesses are very quick to lodge their cheques and cash, and they have been very appreciative of the hub for that. In the wider consumer piece, the hub is a private place to bank, but the feedback that I get most commonly is that businesses would like to have an ATM. They want to check their balances and lift their cash outside working hours. We have a lot of, for example, Chinese restaurants that take only cash. People want to go into town, lift their cash and get their takeaway. However, that is not an option at the hubs. Thankfully, in Kilkeel, there are other free cashpoints. My colleague Harry Harvey is working quite hard in Ballynahinch lobbying for a banking hub for the same reason. Again, in Ballynahinch, there are no ATMs, so that is very much an issue for him. I just want to know whether there is any wider engagement or updates on moves towards getting an ATM or on what we could possibly do on that in the Kilkeel hub.

Ms Farrow: Certainly, I will take that away and have a conversation with LINK about the ATM provision in Kilkeel. It is good to understand a bit more about that local economy and why that measure would be particularly helpful for residents in Kilkeel, so thank you for that.

We are putting a deposit machine in Ballynahinch in the next few weeks, and, probably by the end of November, it will be there. That will do cash withdrawals and deposits, so, hopefully, it will be welcome news in Ballynahinch that we are putting that service in place. I can certainly take feedback to LINK on the ATM side of things in Kilkeel.

Ms Forsythe: That is brilliant. Thank you. Having been close to this as it has developed, I fully appreciate that you are a not-for-profit organisation and that you are to be commended on your work and your recognition of the need for rural banks and cash access in particular. When you are in that space, it is hard to know sometimes how to communicate and take the feedback.

When my constituents have issues with this matter, they find that it is not a government service and they do not know where to raise their concerns or through whom to complain. It is about trying to set up that kind of forum, and I would welcome some sort of engagement on how we could have consultation with the local community and local elected representatives so that those issues can be picked up. It is about just trying to find the appropriate forum to give that back and understand how we actually use it.

Another point that comes up often is that there are a number of banks that do not engage and want to be part of the banking hubs. One of the main banks is not involved in the Kilkeel hub and has opted out of the Newcastle hub as well. That causes a lot of discontent amongst —.

The Chairperson (Mr O'Toole): Is that AIB?

Ms Forsythe: Yes.

The Chairperson (Mr O'Toole): I am sorry. We are not allowed to say who it is.

Ms Forsythe: Well, yes. It is easily found out.

Ms Farrow: That is helpful to know.

The Chairperson (Mr O'Toole): I said it, Deputy Chair, not you.

Ms Forsythe: I was not one to get personal. It is widely known. That bank has not come along, and that has caused a lot of discontent among constituents and customers there. I direct them to AIB headquarters on that, because my understanding, and maybe you could confirm this, is that you reach out to all the banks and that whether they are in the hub is a banking decision.

Ms Farrow: I have good news on that front. We are delighted that AIB has recently joined Cash Access UK, which is fantastic news. We know that there have been a lot of local calls for that bank to be present in Kilkeel, and it is thrilled to be part of Cash Access UK now. We are in active discussion with it about when it can be present in the banking hub in Kilkeel. That is great news, and I am aware that it will be very popular locally, having experienced some of the feedback from the hub in Kilkeel. Hopefully, that will be welcome news to the Committee.

The other thing that I wanted to raise in response to the idea of more community engagement is the fact that the Kilkeel hub was created before we really had our full team in place, if I am being completely honest. We now have a specialist team that works actively with [Inaudible.]

It is in Warrenpoint today, and yesterday it was in Portrush. There is no reason why it cannot come to Kilkeel and host an event where people can come along and find out how the banking hub works, give us feedback about how they think that it can be improved and for us to give the local community an update on what it can expect in the future. We would really welcome that opportunity if it is something that you would welcome too.

Ms Forsythe: That is excellent news about the expansion. It would be good if it could be reviewed for the Newcastle hub, because it is obviously going to open in a temporary location on 13 November. It would be really good if we got LINK in there too. In an earlier session, we talked about the bank closures phasing out, and that was the last bank standing in Kilkeel. A lot of people moved their banking services there, so they were particularly upset that LINK was not in there. For me and my area, as a rural constituency, it is about businesses having that access to banking their money, night safes, security for their money, privacy to do their banking and access to cash. A lot of our small businesses in rural areas operate mainly in cash due to connectivity issues that occur from time to time.

It really makes a huge difference, so banking hubs are very good for our community. I welcome any engagement that we could possibly have on how we can make them the best that they can be across Northern Ireland. I recognise that yours is a not-for-profit service and not a government agency, and we welcome the fact that you are in Northern Ireland. It was said that we have a significantly higher proportion of people who are looking for access to their cash than the rest of the UK. It means a lot, and it is very important for us that you remain in Northern Ireland and do well, so thank you very much.

Ms Farrow: Thank you very much. That is really good to hear. I will come back on that briefly. We are still quite early on in the journey of having banking hubs. They are still relatively new, and we are looking to evolve them. It is really important that, as a company, we get that feedback so that we can work with the banks to make them as good as they can be. We are also aware of some differences in Northern Ireland in cash and cheque use, demographics, how customers behave and the fact that localism is more prevalent. We are really keen to understand some of those local cultural dimensions so that we can try to make sure that the provision in Northern Ireland is appropriate and works for people.

The Chairperson (Mr O'Toole): No other members have indicated that they wish to come in. At this point, unless anybody else wishes to come in, I thank you, Cat, for that briefing. It was useful. We may come back to you. Please keep us abreast of the issues. The points were well made about keeping us abreast of any developments. As a Committee, we would very much appreciate being kept abreast of any statistical or reporting data that you produce, if you are able to do that. I do not know what Cash Access UK produces or whether that emerges in your discussions with the FCA, but we would welcome information on that. We are happy to get more data and information rather than less. We will keep you posted, and I am sure that we will be in touch with you again.

Ms Farrow: Perfect. Thank you very much for having me.