Following a trend of local branch closures since 2010, 2017 is looking likely to see hundreds of additional branches shut their doors.
Most of the major UK banks have announced lengthy lists of local branches that they intend to close over the coming year, with figures published in the Telegraph suggesting that the number could be as high a 525.
With banks citing an increase in online transactions and a fall in the number of people heading to their local branch as key reasons for the changes, it certainly doesn’t seem that this trend is set to reverse itself anytime soon.
The rise of online-only banking from up-and-coming ‘challenger banks’ such as Atom Bank – which serves its clients exclusively via a mobile app – seems to be another nail in the coffin for traditional banking.
This means that it’s time to look at how such branch closures could affect the way in which we interact with our banks on a day-to-day basis and, most importantly, the impact that it might have on vulnerable groups.
Most obvious among these are the people who either do not have access to the internet or are not computer literate enough to complete all of their banking needs online.
While telephone banking is an option, it doesn’t offer the flexibility of internet banking – and elderly or low income groups in particular may struggle to travel further afield if their local branch closes.
Small local businesses are also hit by branch closures, as it can make securing funding far more difficult than it would have been previously. So, while the impact on the majority of people may be small, there is a risk that certain sections of the community will face barriers when they want to access money and deal with their finances.
It seems, then, that if modern banking is to remain inclusive despite the changes in the financial landscape, it’s going to fall on the banks themselves to ensure that they’re doing the right thing for all their customers. This is already taking place in the form of compulsory impact analyses.
As part of these analyses, banks should consider what alternative methods are available for customers to use, and ensure that they are behaving responsibly.
Of course, this doesn’t necessarily stop concern among local communities, and we may hope that as more and more closures hit the news, banks extend their help further – offering solutions such as training in online systems. As the British Bankers Association have stated, “no customer or business should be left behind”.
Luckily, new guidelines coming in to affect this year include encouraging banks to train staff in helping customers find suitable alternatives, as well as asking them to be more proactive when it comes to helping the elderly as well as other vulnerable groups.
The truth is that this is still a relatively recent dilemma, and it may be a while before we know exactly what the long-term impact will be. So, what do branch closures mean for modern banking? Well, we might just have to wait and see.