January 2021

Banking update from Martin Kearsley

In our new series of weekly features from the core Post Office product areas, this week we hear from Martin Kearsley, Banking Director, on the latest in cash and banking services.

Cash Services
One of the key business areas vital to the future of every Post Office is to be the UK’s primary provider of everyday banking cash services. In 2020, £19.6 billion was deposited and £7 billion withdrawn by personal and business customers at Post Offices. An additional £6bn was withdrawn by our POca customers. This combination reflects just how important our Post Offices and branch colleagues are to servicing their local communities nationwide.

With continuing bank branch closures, access to cash continues to become more challenging than ever – and yet remains a vital part of our customers’ weekly budgeting. We need to keep it relevant and accessible in rural and urban areas of the country. We’re right at the heart of the Community Access to Cash pilot programme across the UK, which underlines the importance of our role in cash.

ATM Network
Saving the vast majority of our ATM network from removal by the Bank of Ireland demonstrates our commitment to free access to cash. While we had to take the difficult decision to focus our ATM estate on those ATMs that would not run at a loss, by 2023 we will operate some of the most modern and secure, free-to-use devices in over 1,400 locations.

Banking Framework
Our Banking Framework agreement with increasing numbers of banking partners continues to benefit both Postmasters and millions of customers who have convenient access to everyday banking services over our counters. While Covid-19 has impacted banking, we are seeing that new customers, who came to us during the pandemic, are staying with Post Office, particularly those who need cash depositing services.

Discussions with our banking partners continues around the development of the third Banking Framework agreement and we hope to make progress on these negotiations by the summer.

Post Office Card Account (POca)
We want to ensure that every single POca customer knows that even when they must inform DWP of a new or existing bank account into which DWP will pay their benefits into in future – we are here for them.

For many, it is part of their weekly routine, we are easiest to get to, to talk to, and just help if they need it. If any of your POca customers are concerned about ‘having to travel miles to get their cash’ please help them clearly understand – their money will still be available, through you, just like it always has been.

Make sure they know which banks you can support - we have started issuing leaflets to our busiest POca branches to hand out to customers to help guide them easily along the way. Details of how to order leaflets will be included in Branch Focus in the coming weeks. DWP intend to cease the service in 2022, so your help in the next few months will help bring those customers peace of mind.

HM Treasury Consultation
Late last year, we responded to a call for evidence to many stakeholders in the banking, retail and advisory groups from HM Treasury on Access to Cash. Government was seeking views on how they can protect cash through the introduction of legislation. We responded, highlighting that Government needed to take the entire cash cycle into consideration, including withdrawals and deposits. We have suggested that as bank branches continue to close and additional pressure is put on Post Office, that banks should be required to support our network further.

We are awaiting the outcome of the call for evidence and will update you once we have further developments. In the meantime, we will be continuing our engagement with Government and stakeholders to progress this issue.

Post Office Cash Tracker – December
As you know, December is traditionally a busy time for Postmasters as more people come in to deposit and withdraw cash compared with any other month. This remained the case, despite Covid-19 restrictions in many parts of the UK at the time. Over £1.6 billion was withdrawn and deposited by personal customers at Post Office branches in December; which is over 5% (£91 million) more compared with November.

Our data indicates that millions of people relied on cash, as withdrawals rebounded from November’s lockdown, and customers took cash out to give as gifts to loved ones or to ensure they had money for purchases in the run-up to Christmas.

You can find the full Post Office Cash Tracker for December here.

 

We will continue to keep you updated on developments in banking services and I will provide another update next month. If you have any questions or suggestions in the meantime, please submit a comment below and I will provide an update in the February blog.