Minutes of the Wholesale Distribution Steering Group – 30 June 2021

The Wholesale Distribution Steering Group have the objective of overseeing the design of a new end-state model for wholesale cash distribution. This is to support the UK in an environment of declining cash volumes.
Published on 14 July 2021

Date of meeting: 30 June 2021 | Location: This meeting took place via video/audio link

Minutes

Item 1 – Standing agenda items

  • 16 June 2021 minutes:

The group agreed the 16 June 2021 minutes, and approved their publication

  • Sharing information on stakeholder management

Members noted media coverage of a report published by Age UK concerning the impact of declining cash volumes on the older generation.

Item 2 – Progress Update

Project status

Eversheds reported good progress had been made in discussions within the clean teams. A mechanism has been identified, with legal agreement, whereby clean team members can communicate proposals for asset selection back to their respective organisations, via an approved person. This approach has been helpful in identifying a number of important questions to ensure the right assets are selected.

The project remains broadly on track against the nine week plan, with a slight risk that the business case may be presented a week later, to ensure it captures the right quality of information. Members agreed to review with KPMG progress against their requirements for the business case to ensure this is sufficient to inform a decision at the end of the phase of work.

Eversheds raised the need to maintain progress after the end of this phase of work and will propose options for participants to consider.

Clean team progress update

Eversheds provided a summary of the clean team progress noting that a considerable amount of work had been covered since it was established. The participants within the clean team were reported to bring the relevant knowledge and expertise to the work, and are providing good challenge to the model assumptions.

Eversheds confirmed that there had been broad agreement on the short-list of assets selected for the utility model, and that this would soon be finalised. With legal input, the team are now considering how best to report the outputs from the work back to the IEM securely, without sharing commercially sensitive information.

Item 3 – NCS Review update

The Bank provided an update on the review of the existing NCS rulebook which is currently being undertaken to ensure this remains fit for purpose. Some facilities are likely to serve their purpose effectively under a utility, whereas others may need to be adjusted to better suit the requirements of a utility model.

The Bank noted that the primary objective of the review was to support a resilient, efficient and sustainable wholesale distribution model, and to future proof it against possible changes in the cash distribution activity. If the industry decides to proceed with a utility model, funded by all of the members, then it is expected that this will be the single mechanism through which all NCS functions are carried out.

The Bank confirmed that this would be a consultative process, and they will share emerging conclusions ahead of the end October decision points, but any final decisions on the NCS review would likely follow this decision point.

Item 4 – Review Action Log

Actions were reviewed and closed where applicable.

Item 5 – AOB

None.

Committee attendees

Bank of England: Sarah John (Chair), Nick Butt, Elisabeth Bertalanffy-Fournier, Ronan McClintock, James Best, Molly Galligan

Eversheds: Ros Kellaway, Trystan Richards, Russell Saunders, Mark McLintock

KPMG: Simon Walker

Barclays: Tim Leyden

HSBC: Sue Yarham

Lloyds Banking Group: Martin Barrett

Post Office: Russell Hancock

Natwest: Richard Talbot

Santander UK: Timothy Allnatt

HM Treasury: Derek Dunne

Danske: Kevin McMullan

G4S: Paul Van Der Knapp

TRM: Andrew Mills

Vaultex: Mark Trevor

Apologies

Paul Pugh (Eversheds), Tim Allen (Barclays), Anne Jessopp (Royal Mint), Derek Walker (Virgin Money), Phil Vaughan (Vaultex), Julie Fitzgibbon (BOI), John Garrett (AIB), Azin Roussos, Robert White (Santander)

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