Does the Welsh Government intend to create a Welsh bank that will overcome the problem of bank availability?
Creating a Welsh bank capable of offering current accounts and business accounts alongside the wider portfolio of products and services customers expect of their retail bank, is not within the direct powers of the Senedd.
For this reason, we have worked with Cambria Cydfuddiannol Ltd (CCL) to encourage existing operators to explore and develop plans to this end. This work has resulted in a number of organisations exploring the concept of a community bank in depth. However, market conditions have been challenging and wider developments continue to shape the context for any new delivery models.
The Welsh Government would welcome the emergence of a ‘Welsh Bank’ or ‘Community Bank’ owned by members and serving the needs of our communities precisely because there is such widespread dissatisfaction with the actions of many operators which have withdrawn their services from communities.
Expectations, however, must be realistic. The banking sector in Wales, as in the UK more broadly, has evolved over centuries. While recent years have seen entry into the sector of new challenger banks, the majority of people and businesses continue to lead their financial lives using main accounts with one of the ‘big four’ – Lloyds Banking Group, Barclays Bank, HSBC and Royal Bank of Scotland. Any organisation wishing to develop a community bank in Wales must do so on a fully commercial basis and must operate within the robust sector licensing and regulatory framework.
Following legislation passed by the UK Parliament, new regulations on cash access from the Financial Conduct Authority came into force on 18th September 2024. In response, LINK published a new assessment process to assess cash access in communities and determine where new shared cash services are required. A simple guide to the new process is available:
https://www.link.co.uk/media/nwqly3h4/access-to-cash-assessment-process-infographic.pdf)
In the response to the FCA consultation on Access to Cash - PS24/8: Access to cash | FCA (December 2023 – February 2024) the Welsh Government made the case for a more nuanced view of geographical considerations in relation to access to cash by Welsh communities. This approach has been taken into account and is part of the LINK assessment criteria mentioned above.