New cash machines with benefits to local economies

Following the Treasury’s announcement on progress of the free-to-use cash machine initiative, NatWest and RBS’ announce over 460 machines that have been secured or installed for lower income, under-served and remote areas across the UK. Since July 2006 NatWest and RBS have been securing new sites and this activity pre-dates the announcement of the Treasury Working Group on ATMs. NatWest and RBS currently have 379 new machines in England & Wales and 83 in Scotland.

Independently commissioned research has revealed that these new machines are saving people across the UK around £2.1m per annum. The average user is saving just under £90 a year as a result of NatWest and RBS providing free and convenient access to their money. Research also suggests that the installation of the machines is likely to benefit businesses local to where the machines are situated by almost £3.3 million a year.

The new machines have been installed across the UK in locations such as community centres, convenience stores and sub post offices. Sites were chosen by the public, MPs, community groups and through a partnership with the National Federation of Sub- postmasters.

The success of the scheme relies on identifying suitable ‘homes’ for the machines. NatWest and RBS install and maintain the machines free of charge, while whoever ‘hosts’ the machine is responsible for its day to day running.

The new ATMs being provided by RBS are in communities where the average distance to an existing free to use ATM is more than 4.5km. One new ATM in the Shetland Isles saves local people a 40km journey to the nearest other free to use cash machine.

Customer cost savings

Independent research has revealed that the average person using the new free to use cash machine is saving £7.32 per month – just under £90 a year, as a result of the installation of the new machine. This cost saving is a combination of savings made from reduced travel costs on journeys made specifically to obtain cash and for not purchasing something that wasn’t really needed in order to obtain cash-back facilities.

Better budgeting

The majority of people who participated in the research agreed that their money lasts a bit longer now because with easier access to a free to use ATM, they are more inclined to take out money as they need it, rather than taking out and spending a large amount. In fact, over a third (39%) strongly agreed that this was the case.

Security

This change in behaviour brought about by the installation of the new machine has also made people feel safer. Almost two thirds (63%) said they agree that they feel safer because they don’t have to carry as much cash because it is now easier to get their money as and when they need it. Just under half (44%) strongly agree that they felt safer as a result.

Supporting the Local Economy

Just over half (51%) of people interviewed said that they now spend more money in the shops near the new free to use machine than they did previously. This means that local business and the community are benefiting from the installation of the machines through local money staying in the area.

Nine out of ten (91%) hosts say that their business has benefited from the installation of the new ATM. A similar percentage (89%) of hosts agree that the number of customers spending money in their store has increased. Almost as many (81%) agree that customers are more likely to spend their money in the store now that the cash machine is there.

Almost half (47%) agree that their customers are spending more of their money in their store, giving more support to the local economy. Two-thirds (66%) agreed that they thought that not just their own but other businesses in the vicinity of the new machine will benefit from the installation of the new cash machines.

Research also asked businesses to put a value on the increased business resulting from the installation of the new free to use ATM, on average this figure was £141 per week. Across the commercial sites where a new free to use ATM has or will be installed, this equates to an average annual business uplift of almost £3.3million.

Gordon Pell, Chief Executive, Retail Markets, RBS says: “Our free to use ATM initiative has made serious inroads into solving the issue of free access to cash for some of the neediest and remote communities in the UK. The programme has proved itself to be enormously beneficial to the communities in which we have invested. We were aware from positive feedback that the ATMs were making a real difference, but the research underlines just how much of a difference they are making to peoples’ lives and livelihoods.”

John McFall, Chair of the Treasury Select Committee commented: "The ATM working group worked with the financial services industry to ensure that new free cash machines were made available in low-income areas. This initiative has been a great success. Congratulations are due to the banks for their efforts in this area and in particular to the Royal Bank of Scotland Group, which has exceeded our expectations in its delivery of free cash machines."