BoE publishes first annual report on wholesale cash distribution market oversight regime

The Bank of England (BoE) has published its first annual report on the wholesale cash distribution market oversight regime, following its full operationalisation on 12 June under Part 5A of the Banking Act 2009, as introduced by the Financial Services and Markets Act 2023. The report outlines the BoE's supervisory approach in promoting the effectiveness, resilience and sustainability of the UK's wholesale cash distribution (WCD) industry. It also highlights several market-wide risks to the WCD market, which are set out below.

• Potential cash centre closures or market exits driven by high fixed costs and declining cash usage, which could result in further cash centre closures across the WCD market, as firms strive to lower costs and increase efficiency. The BoE has set out Codes of Practice to manage such structural changes in an orderly manner.
• The build-up of surplus coin due to reduced transactional use poses operational and funding challenges, prompting joint efforts by HM Treasury, the BoE and The Royal Mint (as the issuer of coin in the UK) to undertake work to deepen understanding of these issues and associated risks.
• Concentration risks in critical third-party providers, such as cash-in-transit services and cash- processing equipment manufacturers, which could impact operational resilience.

The BoE is expected to provide a more detailed assessment of these risks in its next annual report, supported by analysis from data submitted by firms. Recognised firms are expected to fully comply with data reporting requirements by end-January 2026.

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