More than a fifth of consumers in Northern Ireland saw their local bank branch close within three years, a report from a Stormont committee has said.

The Finance Committee also said that the number of cash access points in the region is lower than Scotland or Wales and half of people living in a rural location in most areas are more than one mile away from free access-to-cash services.

The committee’s report recommended that the Executive should examine alternative measures of how available public funds could be used to support local banking and financial services provision.

The committee launched its inquiry into the banking and financial services landscape following a number of local bank branch closures since 2020, as well as the arrival of banking hubs.

Committee members expressed concerns over the impact that the changing banking landscape is having on individuals and businesses in terms of access to cash and advice.

The report said: “Members are also concerned that there is less competition in the banking and financial services sectors here, causing the offering the individuals and businesses to be less advantageous than other parts of the UK.”

Research commissioned by the committee showed that in an analysis of bank closures from 2020 to 2023, 21% of consumers had seen their local bank close.

The report referenced research from the Consumer Council Northern Ireland which stated that 166 electoral wards across the region have two or more banking services, 187 have one banking service and 109 have no services.

The report said there are 16,000 cash access points in Northern Ireland compared to 50,000 in Scotland and 27,000 in Wales.

It said that in all council areas apart from Belfast and Ards and North Down, around half of people living in a rural location are more than one mile away from free access-to-cash services.

The report said many rural areas in Northern Ireland could become “ATM free zones”, stating this would have a “negative impact on consumers and rural communities”.

The report added: “This is not a problem only for rural areas. Retail NI advised that they have seen the number of available ATMs decrease province-wide as they become uneconomical for retailers to run.”

The committee said there are a ranges of banking issues which are unique to Northern Ireland “ranging from cash reliance to an historically distinct market to greater rurality and cross-border issues”.

It said that banking and financial services is not a devolved issue but the Executive has a “critical role to play in communicating these issues” to the UK Government.

It has recommended that there should be consideration given to a stronger oversight role for the Financial Conduct Authority (FCA).

It said: “The FCA must do more to monitor and mitigate against the differences in the NI banking and financial services landscape that disadvantage consumers here, which include increased rurality, reliance on cash and issues affecting cross-border banking.”

The committee welcomed the establishment of banking hubs, shared areas which offer banking services, but said “they do not replace bank branches”.

Its report also expressed concern that Post Offices “are seen as a full replacement for bank branches that have closed in an area”.

It said: “They do not provide the same services and many struggle to be sustainable. It is not sufficient for there to be an expectation on the part of the banks that the Post Office will fill the void left by branch closures.”

Members of the committee said they would raise concerns with the FCA and Cash Access UK.

The report added: “The committee recommends that the Executive looks at public funds that are available and consider whether there are alternatives ways that departments and, perhaps, councils which hold these funds can leverage them into supporting localised banking and financial services provision and, in so doing, effect community-based investment and change.”