In October 2022, the FCA launched a fabulous bit of guidance entitled ‘Branch or ATM closures or conversions. Anticipating the future rush, they framed the requirement perfectly: –
“When firms are considering closures or conversions of branches or ATMs, they must ensure they make and implement these decisions fairly. To do this, firms need to ensure they understand the needs of customers and consider how changes affect them before they decide how to proceed.”
The decision is therefore to be taken upon an analysis to include the needs of customers currently using the sites (including the needs of relevant SMEs or micro-businesses and customers in vulnerable circumstances) and the likely impact of the closure or conversion, and alternatives that are or could reasonably be put in place to continue to meet those customers’ needs. Analysis could involve the firm reviewing the data it already holds, engaging with local groups, charities, and the local authority, as well as gathering data through a staff or customer survey.
Better still, the guidnce specifically stipulates: –
“We also expect firms to proactively identify and engage with relevant stakeholders besides customers that may have an interest in the closure or conversion.”
And in a nod to having an open mind, without predetermination: –
“Firms should carry out these analyses before they finalise proposals and keep them updated throughout the process to take into account changes following, for example, feedback from customers or other stakeholders after the firm’s decision is announced. Following these analyses, firms may decide not to go ahead with the proposals and keep the existing sites partially or fully open.”
Now all of this is great guidance – and we’d argue that similar should probably apply to any public interest entity. Trouble is, it doesn’t seem to be enforced.
The recent announcement by Lloyds Banking Group to close 136 more branches is prime example. As a customer of those banks and with the threat of our local branch closing, no sign of a consultation. Perhaps they did and we missed it – the guidance doesn’t say you have to do a good job!. Either way, we certainly missed the publication of the analysis and ongoing debate. Did you?
Our view is that financial institutions either do this properly or we do away with the regulator.