Bank and Building Societies Branch Closures

Nearly 300 UK banks and building societies are scheduled to shut down by the end of the year…

Banks are Closing

5,355 bank branches and building societies have closed or are planning to close since the start of 2015. In 2023 alone, 300 are scheduled to shut down by the end of the year, with more branches announced to shut in 2024.

Some of the banks closing their branches this year are:

  • HSBC…closing 114 banks in 2023
  • Lloyds… 36
  • Natwest… 66
  • Barclays…41
  • Halifax… 23
  • Santander… 5
  • Nationwide… 2
  • TSB… 9

Digital Banking

Digital banking and mobile-only banks are becoming more and more popular, acting as a driving force to branch closures. In 2023, 24% of Brits have a digital-only bank account, acting as a huge rise from 9% in 2019. A widely cited reason for this is convenience, with 49% of those who opened or are intending to open a digital only bank account citing this as a driving factor.

The way in which we manage our money is changing, so are branch closures merely a symptom of this?

16% of people have opened or intend to open a digital only bank account due to a lack of branches in their area. Therefore, branch closures can be seen as both a cause and an effect of digital banking. As more people use mobile and online banking, there is less of a need for in-person branches, leading to closures. But as more branches close, more people are driven towards online banking as the only alternative to travelling to access their bank.

Consequences of Closures

It’s important to ensure that the closure of branches doesn’t contribute towards financial exclusion of vulnerable groups, especially since the elderly and disabled are most likely to face difficulties moving to online banking.

Through the Financial Services & Markets Act 2023, Parliament has asked the FCA to ensure people do indeed have reasonable access to cash deposit and withdrawal facilities.

“Our current assessment is that, despite branch closures, for most people, access to cash is generally good […] Nevertheless, we recognise that the shape of branch networks is changing rapidly, as the way we pay adapts too […] while digital payments make life easier for many, cash is still vital for some consumers in the UK with 3.1 million adults (6%) using cash to pay for everything or most things in the 12 months up to May 2022. Cash remains particularly important for consumers with vulnerable characteristics and many small businesses. We recognise therefore that if the pace of change is not managed sensibly, those customers reliant on cash could be significantly affected” FCA, August 2023

You can click here to read the current version of the government bill

However, we need to recognise that this issue is larger than being able to access our money. Some people need specialist advice, and limiting the number of in-person banks and building societies only serves to make this more difficult to access. For example, we might be able to access our money from our bank account via an ATM, but we also might need help in deciding which type of savings or current account to open in the first place. This kind of advice needs to remain available face-to-face.

Additionally, we should consider the impact of these closures on lonely and vulnerable people. For some people, particularly some of the elderly, the only human interaction and conversation they have all day is when they speak to the bank teller or the supermarket cashier. Yet, more and more supermarkets are becoming dominated by self-checkout machines and our banks are now in danger of moving entirely to our phone and laptop screens.

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