Banks and building societies will be required to make sure local communities have adequate access to cash as part of new regulations from the Financial Conduct Authority (FCA).
Starting from 18 September, lenders must assess whether local areas lack essential services such as branches and ATMs and take action to address any significant gaps.
Failure to comply with these new rules could result in unlimited fines for the 14 largest high street lenders.
Under the new regulations, banks must also maintain these services, including a branch or cash machine, until a suitable replacement is available.
Sheldon Mills at the FCA, said: "Three million people continue to rely on cash, even as digital payments become more popular. And many small businesses still need somewhere to safely deposit their takings each day."
Industry research by UKFinance on Wednesday revealed that cash remains the second most popular payment method in the UK.
Despite a decline in overall cash usage, 1.5 million or 2.6% of the UK primarily used the British currency in 2023, up from 1.7% of the population in 2022.
However, cash accounted for 12% of all payments in the last calendar year, down from 14% in 2022.
The FCA's move aims to address concerns over the impact of branch closures on rural communities and vulnerable populations.