A report released earlier this year warned that half-a-million people across Scotland are at risk of losing access to cash due to the current rate of bank branch closures.

According to the Scottish Affairs Committee’s Access to Cash report, more than half (53%) of Scotland’s bank branches have closed since 2015 – the highest percentage loss out of the UK’s four nations.

While many Scots rely on cash to keep track of their monthly budgets, the report warned that a significant portion use cash due to difficulties in adapting to digital services – and older people are at high risk of being left behind.

The Post Office has filled the void of banking services within many communities, the report revealed. However – much like our bank branches – Scotland has experienced the highest percentage of Post Office closures anywhere in the UK.

So where does that leave the formidable number of people who rely on services that allow them to physically access their cash?

Scottish fintech OneBanx hopes to address this growing concern. The company’s core tenet is one of accessibility – currently operating three pilot kiosks, found within Co-op supermarkets in towns with no remaining bank branches – namely, Lochgelly, Kilwinning and Denny.

It’s an endeavour that’s been garnering attention throughout the broader Scottish fintech sector, with the company’s work in financial inclusion earning them a special commendation at this year’s Scottish Financial Technology Awards in the Social Impact category.

Earlier this year, the firm recruited Marianne ‘Mara’ Breen-Hart, who became OneBanx’ chief operating officer. We caught up with Breen-Hart to discuss the rising tide of fintech policy and practice that is, in many ways, leaving behind those unwilling – or in some cases, unable – to keep up with the changing requirements to engage with modern banking.

What’s happening to our bank branches?

UK bank branches are closing at an alarming rate of more than 50 a month over the past five years and with more than 200 closures already this year. Physical bank branches have been viewed as costly operations for banks for numerous years and efforts have been made to promote self-service within the branches so as to limit the cost of staff.

However, the rise of digital banks, which thrived during the pandemic, has put the traditional high street bank branch under even more pressure and more concerningly, is leaving the non-digitally native (of which there are many) with ever fewer options.

Through its ambitious expansion plans and executive hires earlier this year, Scottish fintech OneBanx has showed a statement of intent to fight back against this rising tide – particularly with the addition of Breen-Hart, who was particularly drawn to the cause-driven framework of OneBanx.

On this, she says: “OneBanx is essentially a tech for good company which uses new technology solutions in an inclusive way to support all members of society. We care about free access to cash and helping those customers who would otherwise be left behind. I love the social purpose and impact of my work as Chief Operating Officer.

“My focus currently is on our expansion plans, and smooth running of our current operations, as well as thinking about our future operating model and building on the fantastic team we already have in place and are expanding each day to support our growing business.”

According to Breen-Hart, the banks say they are “responding to consumer demand with more people using online banking and fewer visiting branches.”

She adds: “What motivated us to set up OneBanx was a belief that customers still value face-to-face banking. What is needed is a shared branch model based on the latest open banking technology, ideally one where banks share the cost, which will make fully staffed branches a viable proposition where otherwise they would struggle.

“Appreciating that we need to cater for different customer needs is important.”

The digitisation of the financial sector has not been incremental, with the pandemic in particular heralding a tectonic shift, that, in its wake, has left many banks with a dilemma about how they serve communities where so many are still reliant on cash.

According to Adrian Roberts, Chief Commercial Officer at LINK, 500,000 people in Scotland are dependent on cash, which amounts to approximately one in ten people in the country. Many older people, such as those on low and fixed incomes or a limited budget, prefer to use cash as a means of effective budgeting or because they are more comfortable with this form of payment.

On this, Breen-Hart says: “Age Scotland estimates that 140,000 adults in Scotland do not have a bank account and 34% of over 60s do not use the internet. Scotland is also disproportionately affected because of the impact on remote and rural areas of the country where branch closures leave customers having to negotiate far greater geographical distances to the next available location.

“Poor broadband connections or weak mobile signal can also make online banking problematic in certain areas with poor coverage. It is important that no one is left behind in the race to embrace digital banking.”

The great digital on-boarding

It could be argued that, while the mass move to online banking has engendered swaths of financial exclusion, much has been forgiven as the legacy framework has been upended by big, marketing-driven digital transformation and digitisation progress that could potentially mask the shortfall of exclusion under a guise of progress and solutions under the unique difficulties presented by a global pandemic that’s indelibly changed the world.

“Clearly banks are keen to be seen as embracing technology and digitisation and that is great for customers who are happy with digital banking,” says Breen-Hart.

It should be made clear that OneBanx isn’t out to reverse the un-reversible. Breen-Hart, and by extension, OneBanx, clearly understand the inevitability of digital banking. OneBanx believes that branches should be used to help people go digital, rather than merely serve those who cannot or do not want to.

She adds: “20% of the population struggle with online banking. We are actually very proud of the way OneBanx is helping those people overcome their hesitancy which we can do because we have trained staff in our kiosks called digital agents, who can help customers get online.

“One of the customers we have managed to help register in one of our kiosks for online banking first time was 94 years old. Technology, innovation, and human interaction can reach everyone across the UK if we have the correct structures and support in place.”

There are several voluntary agreements in place to help maintain access to cash, an example being LINK’s Financial Inclusion Programme, which offers free access to cash via ATMs in some of the UK’s most rural and deprived areas.

However, it should be noted that these are very much voluntary, which raises question of what could and should be done in legislative terms to protect cash and people’s right to have reasonable access to face-to face bank services.

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On this, Breen-Hart says: “I know some groups like Which? would like to see the government impose something like the universal service obligation, which telecoms companies have, to ensure banks don’t leave customers without access to cash. The banks are looking at creating a network of shared branches, banking hubs, along the lines that we at OneBanx have been pioneering.

“We have been talking to UK Finance who are running the scheme through Link about participating in that initiative which, if successful, will go a long way towards providing an alternative source of provision for customers in communities where a conventional bank branch is no longer economic.

“We think ensuring that there is competition, innovation and choice for local communities is more important and where government can usefully have a role.”

Having a physical location for banking isn’t just about access to cash. Navigating even your financial planning can be arduous, and it’s not unreasonable to want to defer to a professional to get advice. This, married with the fact that there are services that can only be delivered face-to-face means that there’s a compelling argument to be made that the rapid closure of bank branches – particularly within Scotland – is not reasonably apace with a regressed for the services they provided.

OneBanx is unique as an entity in that, from the ground up, it’s built to represent the transition from physical to digital without gatekeeping one or the other.