Ben Lake, MP for Ceredigion
The west of Wales was home to some of the first banking networks, set up in the 18th century to facilitate the booming trade of sheep and cattle, and to allow Welsh drovers to safely deposit large sums of money on their way to and from London.
It is tragically ironic therefore, that we now face the situation wherein these very same rural communities could soon be deprived of any at all.
In recent years, towns across Ceredigion, and much of rural Wales, have suffered bank closure after bank closure, and the most recent round of announcements represent what seems to be a trend that is accelerating at an alarming rate.
It is devastating for any community to lose a bank, but to have no banks at all is simply disastrous for individuals and the local economy.
We find ourselves in the unsustainable situation whereby some customers in Ceredigion face round-trips of around 50 miles at best if they wish to visit the nearest branch of their bank, and this situation is by no means unique to the county.
Yes, the way in which people bank is changing, but the way in which it is changing differs across the UK and not everyone is changing the way in which they bank.
For many in rural Wales, new and alternative ways of accessing banking services are simply not possible due to a lack of broadband and, as a consequence, online banking for personal use, and card payments (let alone contactless payments) are a distant prospect for many.
Given that there is still a demand for banking services of some sort by rural communities, but the banks appear willing to abandon rural areas, we must consider a comprehensive recasting of our banking model.
It must be redeveloped in a way that ensures the needs of all communities and individuals are catered for – whether they live in rural or urban areas.
Access to banking services is crucial if we want our communities to flourish, and the rural economy to prosper, but Westminster is allowing commercial banks to use simplistic, blanket statistics for the whole of the UK to justify bank closures in the most rural communities.
These closures present a range of challenges to both personal and business banking; challenges that are magnified in rural areas.
The closure of one branch will often require transferring to another branch many miles away. This is a particular problem for older people, or those with poor mobility, and, again, living in rural communities, where transport links are few and far between, merely exacerbates the problem.
Bank branch closures also creates serious obstacles for businesses, and especially small, family-run businesses which still play such a vital role in rural towns and villages.
These owners are forced to close just so that they can travel to their nearest branch to cash their takings. It simply isn’t sustainable for small businesses to close for an afternoon or a day in order to travel to the nearest bank.
The best way to combat this would be to develop a publicly supported, community-based bank network, along the lines of the German community banking model.
This is what we should be aiming for, but in the interim, there are measures we can pursue to at least alleviate some of the pressures felt by those living in the rural communities facing the prospect of the loss of their banking services.
Ministers should arrange an urgent summit of all the major UK retail banks in order to discuss their future plans with regard to their branch networks.
For too long, the approach to branch closures has been reactive; waiting for decisions, and then allowing them to happen.
The Access to Banking Standard must be strengthened, and greater requirements and responsibility should be placed on banks to abide by the communities that have long supported them.
Banks should be encouraged to expend greater efforts to maintain an equivalent level of banking service in rural areas: why not pursue greater co-operation, perhaps establishing ‘banking hubs’ where existing high street banks can co-locate, rather than completely vacate, rural towns, for example?
We may need to look at competition law in order to ensure that there are no unnecessary hurdles for banks to co-locate, particularly in rural areas. If necessary, then why not do so?
Furthermore, there could be a requirement for banks to consider the provision of broadband in an area when contemplating closure, so that areas where online banking is simply not an option are not hit with the removal of physical banking.
Westminster has conceded that one way of addressing the situation could be to bolster the banking offer of the Post Office. Why not build a proper community bank on the existing infrastructure of the Post Office?
We desperately need to decide what services we cannot do without. Work needs to begin on defining, and then introducing a statutory minimum level of banking services for any community, so that our position is stronger in the future.
These are just some suggestions as to how we might begin to re-model retail banking in Wales; there will of course be other ideas.
What is important is that we start to re-develop the way in which banking works for every community now.
We haven’t got the time to wait, and there’s a lot to do if we are to prevent rural communities from being starved of such services announcement, by devastating announcement.