Disappearing rural banks spark Westminster debate

Many rural communities rely on a "hub-and-spoke" model, where small businesses and residents depend on local banks for essential services. When these banks close, it’s not just an inconvenience, it can lead to financial strain, business struggles, and increased social isolation, especially for older people and those with disabilities who may not use online banking. Without a local branch, people often have to travel long distances just to access basic banking services.

MPs highlighted that when both banks and post offices shut down, communities lose more than just financial services—they lose vital social connections too.

Are Banking Hubs the Solution?

One proposed solution is banking hubs, shared spaces where customers from different banks can access essential services. While these hubs help, MPs argued that they must be designed to truly meet the needs of rural communities. They called for a faster and more widespread rollout, alongside stronger regulations to ensure banks consider the long-term effects of closures.

The government acknowledged the problem and reaffirmed its commitment to ensuring banking remains accessible to all. Plans are in place to open 350 banking hubs by the end of this Parliament, offering a range of services beyond just cash withdrawals.

More broadly, the government pledged to improve the quality of life in rural areas, recognising the need for better infrastructure to support access to banking.

What’s Next?

A separate debate reinforced the urgency of the issue. MPs highlighted the impact on vulnerable groups and the growing risk of financial exclusion. Suggestions included changing the way regulators like Link and the Financial Conduct Authority assess community needs, ensuring banking services remain accessible where they’re most needed.

The government agreed that better digital and transport infrastructure is essential but also acknowledged that in-person banking must remain available through initiatives like banking hubs.

Read what the Rural Services Network (RSN) has to say here. 

CAN supports change at governmental level through the national ACRE (Action with Communities in Rural England) network and other national partners, and contributes strategic voice for the VCSE community at local and regional level with local authorities and funders, raising awareness and ensuring that potential issues are highlighted for the sector.

Read more about how bank closures are affecting VCSEs across the county here.