Breaking Down Barriers – Increasing Consumer’s Access to Financial Services

The FCA has recently proposed new rules to maintain reasonable access to cash for personal and business customers across the UK.

Under the proposals, designated firms will be required to assess gaps in access to cash services and to consider local factors when making changes to provide additional services for these gaps.

The FCA’s new powers don’t prevent bank branches from closing. However, the rules will have an impact where branches are a key local source of cash. The FCA will ensure these rules work in harmony with its existing guidance on bank branch closures. Existing law allows retailers to decide whether to accept cash or not – so the FCA cannot require them to do so.

The regulator has shown great focus on improving outcomes for customers in recent years, and these new rules would be another step toward improving consumer outcomes. Nevertheless, more work still needs to be done to address what barriers remain in place for consumers trying to access other financial services.

There can be many factors that can prevent an individual from accessing a financial service. Other common barriers include:

• affordability
• lack of appropriate access to communication channels with financial service providers
• lack of trust, or fear of discrimination
• lack of financial literacy/numeracy, as well as
• overly complex processes or arduous documentation requirements.

In addition, certain populations, such as low-income individuals, rural residents, or people with characteristics of vulnerability may face additional barriers when trying to access financial services.

Sheldon Mills, Executive Director of Consumers and Competition at the FCA stated that the regulator has noticed “an increasing shift” to digital payments in recent years. There are approximately over 3 million consumers in the UK who still rely on cash payments, this includes people who may be vulnerable or who own small businesses. – particularly people who may be vulnerable – as well as many small businesses, which makes it crucial that access to these services are not negatively impacted by recent innovations.

Technology can play a crucial role in addressing the financial inclusion. It can help consumers gain a better understanding of how to manage their finances effectively, provide greater access to products and services, and enable firms to identify clients who require additional support.

If you are interested in learning more, the Development Zone has a range of courses related to topics we have touched on in this article, including our ‘Consumer Barriers within the Financial Services’ course.

If you are new to the Aviva Development Zone, we offer a 14-day free trial where you can try every feature and every course! Click here to find out more: https://mydevelopment.zone/