Major banks are in advanced talks about setting up community banking hubs to protect swathes of the UK from being cut off and unable to access cash or stay on top of their day-to-day finances.
The banks are set to agree to a five-year deal to cover the costs of shared sites where customers of any large bank can pay in or withdraw cash and carry out transactions.
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The only significant sticking point for the banks, which have shut an increasing number of their least profitable branches across the country, is a row over how much each bank will pay.
Expert fear initiative could clear way for wave of closures
Some industry observers have warned that banks may seize on the initiative and trigger a huge new wave of individual branch closures. They say it could give banks the perfect cover to reduce their overall networks closer to around 400 branches each.
It is thought that every branch closure can save a bank up to £1m over five years. Lloyds currently has 1,567 branches, Barclays has 755, NatWest has 833, HSBC has 540 and Santander has 452.
If they slashed their networks to just 400 each, it would mean shutting as many as 2,147 branches between them.
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By GlobalDataLloyds, HSBC, Barclays, Santander and NatWest have all been steadily chipping away at the size of their networks in recent years and Chancellor Rishi Sunak has promised to pass laws aimed at ensuring that everyone who relies on cash can access it.
The push for a bank branch in every town
Officials are understood to believe that a new generation of shared banking hubs is vital to protect vulnerable people from being left without access to banking altogether.
Banking regulator, the Financial Conduct Authority (FCA), is putting huge pressure on lenders to sign up to an agreement by Christmas – or potentially face tough legislation banning branch closures entirely.
The Post Office is overseeing a trial of shared bank branches, which ends next month.
At counter services run by the Post Office, customers with any bank will be able to deposit cheques, pay bills and withdraw cash.
One-day-a-week banks
Earlier this year, an initiative was tried in Rochford, the Essex market town deserted by all big banks by 2017. Rather than their bank having a 24/7 presence on the High Street, residents have been given their local branches back for one day a week.
On Mondays, NatWest takes over the shared High Street branch, on Tuesdays it’s Lloyds, Wednesdays: Santander, Thursdays: Barclays, with HSBC on Fridays.
For Rochford is one of two locations in the UK to test out the new way of banking.
