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To make up for bank branch closures, Post Office will host financial hubs

As banks around the country close branches, City Minister John Glen will announce ideas for centers where people may withdraw and deposit cash.
Glen hopes to announce the proposal for the number of hubs at a dinner for the banking industry next month, while the specifics are still being worked out.

After successful pilot programs in South Lanarkshire’s Cambuslang and Essex’s Rochford, the hubs will be operated as joint ventures between banks and the Post Office.

The Postal Service wants to announce around 200 centers, while banks want to cap the number at between 20 and 50, therefore the two groups are engaged in a heated debate over the plans.

With the Treasury contemplating legislation to compel banks to keep access to cash across the country and the Financial Conduct Authority saying that it may prevent banks from closing the last branch in town, tensions are rising in the negotiations.

According to reports, Glen is eager to make the news because the government thinks it will be a big part of the solution to the problem of banks closing thousands of branches due to declining usage, despite the fact that millions of older and more vulnerable people and small businesses still need to be able to use cash.

The government envisions the hubs, which may be extended over time, as a means of saving the Post Office with bank-funded profits.

Banks have conflicting opinions on the hubs, with CEOs comparing the benefits of a partnership with the Post Office against concerns about the security of the Post Office’s information technology systems and its ability to prevent fraud. Banks are frustrated by the Post Office’s pricing leverage in negotiations and want greater competition introduced.

OneBanks, which is attempting to develop its own hubs for bank customers, the cash machine manufacturer Glory, and the payments business PayPoint are just a few of the smaller players interested in supplying IT and other solutions.

No word from the Treasury. “Cash deposits and withdrawals at two trial Post Office bank hubs are increasing rapidly,” stated a Post Office spokesman.

We are prepared to expand our role as a primary facilitator of more hub installations, which is a topic of ongoing discussion with the government and the banking industry.

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