The FCA has reminded firms to consider the impact of national restrictions on compliance with the Principles, given their existing guidance on branch closures. In September 2020, the FCA published guidance on branch closures and ATM closures and conversions. The guidance supports the FCA’s consumer protection objective and is designed to protect consumers by setting expectation that firms should assess customer (consumer and SME or micro-enterprise) needs and consider the availability and provision of alternative arrangements where closures or conversions are planned.
The FCA’s Principles for Businesses require firms to treat their customers fairly, and communicate with them in a fair, clear and not misleading way. The FCA expect firms to exercise particular care with vulnerable customers.
In January 2021, the Government and devolved authorities announced new restrictions across the UK due to coronavirus (Covid-19). Some banks and building societies informed the FCA that they are either going ahead with branch closures already announced, or announcing new branch closures during the current lockdown.
The FCA is concerned that these activities could have significant consequences for customers. The FCA wants firms to review their plans against their existing guidance and ensure that they continue to comply with its Principles.
In line with FCA guidance firms should consider the impact of branch closures on customers. Where they are unable to meet the expectations of FCA guidance during lockdown measures, they should consider pausing or delaying new branch closures where possible, particularly where this could have significant impact on vulnerable customers. This would be similar to the approach firms took during lockdown measures in 2020.
Where firms consider it is appropriate to continue with plans during this period, the FCA expect them to have considered its guidance and be able to demonstrate how they have taken the concerns and expectations set out in the FCA statement into account. If firms are considering new closures or advancing those previously announced during this period, the FCA expects them to:
- communicate with customers in a way that is clear, fair and not misleading to inform them of the closure proposals. Particular consideration should be given to the best way to make sure vulnerable and hard-to-reach customers are aware of the proposals and are able to contact the firm.
- give customers clear information about how the firm can help them access alternatives during this period of national restrictions, for example support to use online banking.
- where appropriate, engage with customers to understand their needs and properly consider how they will be affected by the proposals.
https://www.fca.org.uk/news/statements/banks-branch-closures-coronavirus-lockdown
