Concerns about elderly people, rural and deprived communities being cut off from cash had been mounting before the coronavirus pandemic struck.
In recent months, a number of major banks have announced branch closures, a move which has been at least partly due to the shift to online banking.
In September last year, the FCA said it expected banks, building societies and credit unions to keep it informed of any plans for closures or conversions “in good time” before any final decision is made.
In its latest statement, the FCA said: “In September 2020, we published guidance on branch closures and ATM closures and conversions.
“The guidance supports our consumer protection objective and is designed to protect consumers by setting expectation that firms should assess customer (consumer and SME or micro-enterprise) needs and consider the availability and provision of alternative arrangements where closures or conversions are planned.
“Our principles for businesses require firms to treat their customers fairly, and communicate with them in a fair, clear and not misleading way. We expect firms to exercise particular care with vulnerable customers.”
Earlier this month, the Government and devolved authorities announced new restrictions across the UK to attempt to halt the spread of Covid-19.
The FCA said: “Some banks and building societies have informed us that they are either going ahead with branch closures already announced, or announcing new branch closures during the current lockdown.
“We are concerned that these activities could have significant consequences for customers.
“It may be harder than usual to reach all customers under the current restrictions and engage with them on closure proposals effectively, for example, small businesses that are temporarily closed.”
Some customers may need to access in-branch services to help them prepare for closures but be unable to do so due to the pandemic, the FCA said.
It added: “Customers may also need additional help to access online banking and making payments. We want firms to review their plans against our existing guidance and ensure that they continue to comply with our principles.
Firms should consider the impact of branch closures on customers, the FCA added.
The statement added: “Where they are unable to meet the expectations of our guidance during lockdown measures, they should consider pausing or delaying new branch closures where possible, particularly where this could have significant impact on vulnerable customers.
“This would be similar to the approach firms took during lockdown measures in 2020.
“Where firms consider it is appropriate to continue with plans during this period, we expect them to have considered our guidance and be able to demonstrate how they’ve taken the concerns and expectations set out in this statement into account.”
A spokesperson for UK Finance, the trade association for the UK banking and financial services sector, said the industry remained committed to supporting customers through the Covid-19 crisis.
The spokesman added: “Growing numbers of customers are opting to use new technologies to manage their money at a time and place that’s convenient to them, particularly during the pandemic.
“But technology is not for everyone and bank branches continue to play an important role in the life of local communities, meaning decisions to close them are never taken lightly.”
The banking and financial services industry has been careful to support more vulnerable customers with a series of initiatives including contact programmes, cash delivery and encashment services for carers, the UK Finance spokesman said.
The spokesman added: “We are working closely with the Financial Conduct Authority on the implementation of its Branch and ATM Closure or Conversion guidance, building on the recent collaborative work that has seen nine in ten branches remaining open during lockdown.”
Customers are now able to access everyday banking services at 11,500 Post Offices across the country, while banks continue to invest in services such as mobile branches to reach more rural communities, the spokesman said.