How banks and shops joined the conspiracy against cash

On a balmy September day in 2015, a man entered a Walsall shopping center in the West Midlands and headed straight to his local NatWest branch.

In his hands were a number of black garbage bags filled to the brim, but they did not immediately arouse suspicion among those around him. However, when he arrived at his destination, the suitcases exploded under the weight of their load and spilled £700,000 in cash.

Rather than ringing alarm bells among NatWest staff, branch staff helped the man repackage the notes into sturdier burlap bags before transferring the money to the bank's vault.

The huge deposit was made by Bradford jeweller, Fowler Oldfield, who deposited more than £260 million in cash at NatWest branches over five years. At times, the quantities were so large that they filled two floor-to-ceiling tanks at the Walsall branch, and excess quantities had to be stored elsewhere.

Although the Yorkshire jewelery company has sales of only around £15m a year, NatWest failed to report the deposits as suspicious before 2016, when police said they were investigating Fowler Oldfield.

In 2021, the Financial Conduct Authority (FCA) brought proceedings against NatWest, with the FTSE 100 bank given a criminal conviction and a £265 million fine for breaching anti-money laundering regulations in relation to deposits.

It turned out that the huge amounts were the proceeds of an alleged money laundering scheme. “Someone was walking the streets with black boxes full of cash,” Claire Montgomery, a lawyer acting for the Financial Conduct Authority, said in court in horror.

The case embodies concerns that British lenders have not done enough to prevent money laundering, especially when it comes to cash transactions.

However, amid regulatory pressures, there are now growing concerns that banks are becoming overly enthusiastic about cash. Last week, The Telegraph revealed that NatWest was imposing new restrictions on cash deposits and withdrawals. The move sparked warnings that banks were forcing customers to become a “cashless society”, threatening to leave millions of people deprived of access to basic financial services and sparking a political backlash amid privacy concerns.

“Sleepwalking in a cashless society”

The decline of cash is a phenomenon that has occurred for most of the twenty-first century.

The rise of digital payments, including Apple Pay and Google Pay, which allow users to pay for goods and services with a wave of their mobile phones, has made banknotes and coins a nuisance for many.

Data from the Bank of England show that the use of cash for everyday transactions has declined rapidly over at least a decade, falling from more than 50% of all transactions in 2010 to just 15% in 2021. Meanwhile, approx. A third of all payments in the UK will be made via contactless methods in 2021, according to UK Finance.