Bank network shrinks by 267 branches in three months: Could your local branch be next on the chopping block?
- Bank branch network shrank by 4.55 per cent between April and June this year
- Major High Street banks have axed over 1,000 branches since pandemic began
- Lloyds, Halifax and Virgin Money set for imminent branch closures
Britain’s bank branch network shrank by 4.55 per cent in as little as three months earlier this year as banks continue to close their doors across the UK.
Between April and June, 267 branches closed, according to FCA data, leaving only 5,599 remaining.
It is no secret that bank branches have been disappearing from Britain’s high streets at a record pace in recent years.
Major High Street banks have axed over 1,000 branches since the pandemic forced the first lockdown in March 2020.
Since January 2015, bank branches have been closing at a rate of 50 each month, according to lobby group Which?, but the pandemic appears to have exacerbated the trend.
Major High Street banks have axed over 1,000 branches since the pandemic forced the first lockdown in March 2020, says Which?, with many more scheduled over the coming months.
The bank branches closing down
Next year, Lloyds Banking Group is shutting 48 more Lloyds and Halifax bank branches across England and Wales.
All closures will take place between January and April, with the locations affected including Balham, Christchurch, Dorking, Prescot, Sevenoaks and Windsor.
Virgin Money also announced plans to close 31 bank branches and axing around 112 jobs as it looks to move more of its operations online.
Among others, Virgin Money branches in Beverley, Blackburn, Lincoln, Macclesfield, Nuneaton, Whitby and Wick are all due to close.
At the start of the year, HSBC said it would shut 82 branches this year and axe counter services at others as it focuses on temporary ‘pop-up’ hubs in a digital drive
In spring, Santander said it would close 111 banks across the UK by the end of August
Are closures set to continue?
Whilst the disappearance of bank branches will be of lesser concern to some, the less tech savvy, older customers and small businesses are watching on with increasing concern that their local branch may be next.
Currently only 60 per cent of the population lives within 2km of a bank branch whilst 12.5 per cent live further than 5km from one, according to FCA data.
‘For those customers without internet access who prefer face to face banking, the choices are becoming fewer and opening hours more restricted,’ said Hagger.
‘There have been initiatives such as mobile banking vans and banks sharing branches, and some of these lower cost alternatives will probably expand.
‘I think it is inevitable that the branch networks will continue to shrink as online technology becomes the norm for more and more customers – however that’s of little comfort for the elderly who don’t understand or trust the internet.
In March, Santander announced plans to close 111 branches by the end of August 2021 in response to the ongoing shift by customers towards mobile and online banking.
One in four people say they would avoid local branches out of preference for a digital-only experience, according to new research from analytics leader SAS.
It also found that more than one in eight banking customers started using a digital service or mobile app for the first time during the pandemic.
Looking ahead, there is little evidence to suggest the online banking trend will slow either.
Almost two thirds of the industry’s top executives think branch-based lenders will be ‘dead’ in the next five years, according to a report by the Economist Intelligence Unit for financial software company Temenos.
The research by SAS also found that of those now using digital banking services, nearly one in five anticipate using digital service or mobile app in addition to in-person visits, with over a quarter intending to make digital a permanent replacement for in-person visits.
Andrew Hagger, founder of MoneyComms said: ‘I think the covid pandemic has seen banks refocus their attention on the viability of their branch networks post covid, with more customers transacting online rather than coming through their doors.
‘Banks will be looking at branches which are now less viable due to lower footfall, particularly if they have another outlet within fairly close proximity.’
THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS
Santander’s 123 Lite Account will pay up to 3% cashback on household bills. There is a £2 monthly fee and you must log in to mobile or online banking regularly, deposit £500 per month and hold two direct debits to qualify.
Virgin Money’s current account offers a £150 Virgin Experience Days gift card when you switch and pays 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 must be paid into a linked easy-access account and 2 direct debits transferred over.
Club Lloyds’s Current Account pays 0.6% interest on balances of up to £3,999, while those with sums of between £4,000 and £5,000 will earn 1.5% on that balance. There is no cost if you pay £1,500 each month, otherwise a £3 fee applies. Must hold two direct debits.
NatWest will give newcomers £100 when they switch their account and a further £50 if they stay for 9 months. Customers must pay in at least £1,500 in total and log in to its mobile app or online banking by 13 January 2022 for first £100
Nationwide’s FlexDirect account comes with 2% interest on up to £1,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both perks last for a year.