Maintaining Physical Bank Branches Keeps Cash Alive In Underserved European Communities

From the vinyl revival to the enduring appeal of film photography, analog technologies that many thought would give way to the rising tide of digitization have in fact remained culturally and economically relevant, even if they no longer play the leading role they once did.

In the banking equivalent of this phenomenon, after years of retreating from Europe’s high streets, physical bank branches are having a small resurgence.

Remote Areas of Spain Will Soon Have Expanded Banking Access

Governments in Spain and the U.K. are the latest to introduce measures to prevent rural citizens from losing access to in-branch financial services, which, in face of Europeans’ growing preference for online and mobile banking, have dwindled in recent years.

Last week, the Spanish economy ministry announced that it has agreed a roadmap with banks to guarantee rural villages’ access to financial services, ensuring that all villages in Spain with more than 500 residents will have at least one bank branch, ATM or mobile branch.

The Spanish deal is similar in scope to one forged by the Swedish government in 2020 when access to cash services was legally enshrined following a movement by rural groups and consumer associations known as the Kontantupproret, which translates as the “Cash Uprising.”

Learn more: Cash Holds Firm in Europe Despite Dwindling Hard Currency Supply

In the U.K., similar guarantees form part of the upcoming Financial Services and Markets Bill, which will give the Financial Conduct Authority (FCA) a mandate to ensure the “reasonable provision” of cash services across the country.

Related: UK’s Financial Services Bill Will Make Stablecoins a Form of Payment

As was the case in Sweden, legal protection of access to cash services has been lobbied for by consumer associations alarmed at the rate at which bank branches and ATMs have been closing in the country.

One such association, Which?, earlier this year published a study showing that almost half of the U.K.’s bank branches have closed since 2015.

The study observes that rural communities have experienced closures at a higher rate than the national average and now have just 0.1 bank branches per 10sq km compared with 2.6 branches per 10sq km in urban areas.

Among the worst affected have been areas in Wales, with the constituency of Carmarthen East and Dinefwr having the highest number of closures in recent years. Since 2015, the area has lost 13 of its 15 bank branches.

In an effort to reverse the trend, the Welsh government is supporting the creation of a new community bank in collaboration with Monmouthshire Building Society.

Planned for a launch next year, Banc Cambria will look to replace some of the country’s closed branches by targeting areas that are under or unserved by the U.K.’s commercial retail banks.

As Vaughan Gething, the Economy Minister for Wales, explained: “It will be a modern, full-service community bank, headquartered in Wales, providing access to bilingual products and services, through a range of channels including digital, online and in-branch […].”

Gething added that the goal is to “provide a positive impact on communities and high streets across Wales, improving access to everyday banking services for all citizens regardless of income or wealth, as well as for small businesses across the whole of Wales.”

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