In the past year over 600 branches have shut down in the UK and unsurprisingly the rural areas have been hit hardest. These figures however do not take into account the openings of new branches. Although the number of branches, overall, are closing there are still certain banks opening new branches and expanding into areas where the older banks are moving away from.
The individual country that is hardest hit by these closures is Wales. Five areas in the country are in the top 10 locations losing banks.
While the closures were taking place between April 2015 and April 2016 the banks, consisting of Lloyds, RBS, HSBC, Santander, Barclays and the Co-operative, reported saying that the demand for branches has been falling. This has been caused by an increased number of people switching to online banking. With RBS leading the amount of closures, 166, HSBC aren’t far behind with 146 according to the BBC.
Since the start of customers transitioning from physical banking to digital banking approximately 3000 have closed in the past decade, but with the rise of fintechs and new banking platforms that number is like to increase dramatically over the next decade.
Other areas hit hard by these closures are commuter towns, however this is correlated to customers, if using a physical branch, using one nearer to their place of work. While the older branches seem to be closing a considerable amount of physical branches, new branches such as Metro Bank, are rapidly expanding outside of London now into commuter towns.
According to the British Bankers’ Association which is made up of the typical High Street names stated that transactions across the board went down by around 6% in the past year alone. This correlates with the increase of online banking daily log-ins which was peaking around 9.6 million daily. When a bank is considering the closure of a branch it is the protocol for that bank to consider alternative arrangements over a 12-week consultation process.
Those who are most affected by the closures are, and will continue to be, customers who have limited or no access to the internet, or those in the most rural of areas. This means that the persons who will be most likely to be affected will be the elderly. The alternative for this demographic of people is to utilize the Post Office. With a bigger network than all the mainstream banks conjoined, 11,500 branches, customers are able to complete basic banking at these locations.