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Barclays UK CEO: The old banking model is no longer fit for purpose — the industry needs to work together

·3-min read
Barclays UK CEO Matt Hammerstein (Barclays)
Barclays UK CEO Matt Hammerstein (Barclays)

The recent COP Climate Change discussions reinforced that systemic issues facing society cannot be solved by anyone on their own – no matter how committed, well-intentioned and well funded they may be. Tackling the climate emergency requires trade-offs, but also wide-ranging collaboration to succeed.

There are rapidly emerging issues in banking that require a similar approach: How to provide appropriate cash access for those who need it? How to stop the scourge of fraud and scams? How to ensure no one is left behind by the accelerated digitisation of banking?

The answer to all is: we need a united coalition of determined organisations. Not just industry but consumer groups, regulators and Government.

Yesterday saw a great example of this in action; a pivotal moment as banks, consumer groups and cash providers agreed to ensure the long-term availability of cash – together. This landmark agreement, brokered by the Access to Cash Action Group, so ably led by Natalie Ceeney CBE, marks an important shift to ensuring widespread cash and banking access for communities where services may be, or become, limited.

This shift — from individual operators to collective action — is a direct response to changing behaviours: contactless spending has risen 60% since 2019, while cash use has dropped by almost a third, and is set to continue.

As a result, the current physical banking model is no longer fit for purpose. It’s built on the back of branches, where “vaults” store cash and offer help with manual processes like paying bills or signing documents – which can now all be done on an app. That model is simply not meeting the broad needs of society in a modern digital world.

There are some who are still not able to bank online or digitally. We have to do more to help them – in conjunction with others — to make sure they have appropriate access to the internet and to build their digital skills so they can be part of the modern economy. We also need to ensure there’s a sustainable way of providing services that some will still require.

We can draw an analogy with health care, which is also evolving. Like GPs, we should be able to sort simpler, straightforward issues via an online or video check-up. When it comes to something serious (for finances, this might be complex fraud or a bereavement), we can offer an in-person appointment. We want customers to feel seen, heard and treated properly.

Banks need to become more accessible by ensuring their expertise and empathy is in the community – not sat waiting for the community to come to it. These foundations will enable banks like Barclays to offer more support and flexibility in the moments that matter most.

Yet this support can only be delivered by shared efforts so that we don’t leave anyone behind. Banking hubs are a great example of this in practice.

I believe that we should actively consider what other problems could be solved by collaboration between banks, other industries and representative groups.

Preventing scams is one example. With the threat rapidly increasing — 2021 is on track to be the highest ever year for scams — rapid collective action is required: across technology and telecommunication companies, law enforcement, banks and Government. At the moment, the criminals move too quickly to exploit gaps between all of these players. Initiatives like Stop Scams UK (SSUK) are important in this regard, but more is needed to stop scams at source.

The Access to Cash Action Group can set the tone for future ways of working across industry and others interested in protecting society’s interests. This sort of collaboration must continue to ensure banks adapt to — and even pre-empt — the changing world, preventing problems before they occur.

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