The declining number of cash machines, especially in more rural areas, could hit older people hardest of all.
Over the past few years all of Britain’s major banks have reduced the number of branches they operate. Only last month the Clydesdale and Yorkshire banks announced they would close another 50 branches, while HSBC announced another 62 of its branches would shut down.
These are just the latest in a long line of closures, and it is almost always the smaller, less busy branches, usually in more rural areas, which get the chop. Whenever such closures are announced, it is usually reported that the relevant bank “blames” a rise in online banking, as if this is something out of their control. In truth, the banks have been actively promoting online banking – where people effectively manage their own accounts by logging in on from a home computer or even a smartphone – for several years.
Customers who call into a branch to carry out their banking business are often asked “do you know you could do this online?”, with some saying they feel pressurised into online banking. When their local branch closes they are often left with little choice, despite serious and valid reservations about security and online theft by computer hackers.
As branches close so do their “hole-in-the-wall” cash machines, meaning many people, especially those who are less mobile, have limited access to cash. In some communities there are standalone free cash machines, perhaps at shops or petrol stations, provided by LINK, the UK’s network of ATMs (Automatic Teller Machines). But now these too are under threat, as banks seek to reduce the fees they pay for the standalone cash machines.
Talks have been ongoing between the major banks and LINK, but unless an agreement is reached, up to half the free-to-use standalone cash machines which make up the LINK network could disappear. Again, it would probably be the less busy ones in more rural areas which would be the first to go, leaving many people in those areas high and dry when it comes to accessing their cash.
Moving towards a “cashless society” – with electronic transactions carried out online, by smartphones or using debit and credit cards – would suit the banks well, helping them massively reduce their operating costs. But it might not suit all their customers, especially the older generation who are more reluctant to embrace the new technologies or simply don’t know how.
Some banks have even started schemes to “teach” their older customers how to use the new technology, but many simply do not want to, and that is their choice. They are from a generation which grew up with transactions by cash or cheques, and are naturally wary of online banking – understandably so given the frequent stories about people whose accounts have been “hacked”.
But like it or not, people are being herded towards the cashless society, simply because they can no longer routinely or easily access their cash. If you live in a smaller town or village with no bank, Post Office or cash machine, and you don’t have your own transport, what do you do for cash?
Simon Bottery, policy director at national charity Independent Age, said older people faced a “double whammy” of bank closures and the loss of cash points which would leave them financially excluded from society: “Elderly people are not ready for this,” he said. “The most obvious issue is that they tend to be less mobile so they can't shop around for a free cash point.”
“In order to avoid paying fees, they may pass on cards to friends or family who are more able to get to a free cash point. However, this not a good idea as it opens people up to financial abuse.”
Another danger is that older or less mobile people may start withdrawing large sums on their infrequent visits to a cash machine, and keeping the cash at home. This too is an obvious security risk and not to be advised.
While society might be moving towards an era where cash money is a thing of the past, not everyone is ready for it and they should still have a choice. It is, after all, their money. Perhaps a bank that finds a way of offering this choice will also find a large pool of customers just waiting to sign up?