Big banks plot to axe eight in 10 branches in Armageddon on High Street

Since 2015, nearly 5,000 bank branches have disappeared from our shopping streets, making it increasingly difficult for many customers to personally arrange their banking affairs.

Yet, according to banking insiders, there is much worse just around the corner – the equivalent of bank branch Armageddon.

Another 4,000 branches could be closed over the course of this year and next year if the big banks radically change the way they offer their services.

Currently, there are 5,500 banking and building societies nationwide. It means that about eight out of ten can be closed.

While high street banking will still be available in major cities, branches elsewhere will disappear, in some cases jeopardizing the commercial livelihoods of the communities they leave.

Even in those areas where a bank decides to keep its branch open, it is likely to be a shadow of its current self.

Opening hours are limited, counter services are kept to a minimum, and customers are encouraged to use machines in branches – ATMs and cash deposit services. The personal touch will be gone. Speak to a bank manager? Never mind.

If banking insiders are right — and they have nothing to gain from painting a bleak picture — the country’s network of bank branches would be reduced to no more than 1,000, leaving hundreds of communities (small towns and villages) bankless. to stay.

Insiders say the banks are holding back significant branch cuts until legislation on access to cash is passed by parliament later this year.

They play this waiting game to deflect criticism that they are anticipating the new rules. But once the legislation is in place, they will use the regulatory focus on “banking hubs” to strip down their branch networks to the bone.

While some of the abandoned communities could benefit from new-style banking hubs (where multiple banks use the same premises to serve their customers), experts fear the rollout of these community banks won’t be fast enough, with Main Streets being damaged beyond repair by all over the country before they get there.

Already towns that promised a hub, such as Welshpool in Powys, have remained bankless pending its opening, causing a sharp downturn in business for local retailers.

All signals are ominous. According to consumer group Which? 54 branches have been closed per month for the past eight years.

Still, the closing rate is now a notch higher. This year, 213 branches have already been canceled, an average of 71 per month. The latest batch of impending closures, confirmed by NatWest and Lloyds late last month, will result in the closure of 81 stores in the coming months.

Experts fear that this monthly average is about to skyrocket further, with Lloyds leading the way. Among its well-known brands – Bank of Scotland, Halifax and Lloyds – it has far more branches than any other competitor: 1,319 compared to NatWest’s 738. But a brutal culling is predicted.

Caroline Abrahams, director of charity Age UK, says the scale of bank branch culling ‘appears to be getting worse’.

She adds: “It’s a serious blow to the millions of elderly people who rely on branches, especially those who aren’t online or don’t trust mobile banking. These problems are exacerbated when branch closures coincide with poor local public transportation, a lack of ATMs, substandard internet service and mobile blackspots, making it extremely difficult for customers to access their money.”

In February of this year, the number of free-to-use ATMs fell below 40,000 – less than half the number eight years ago.

Ms Abrahams adds: ‘The banks have a clear responsibility to do everything they can to continue to provide essential banking services in the coming years. Bank branches are a life saver for many elderly people, but their interests seem to be outweighed by the appeal of higher bank profits.’

Federation of Small Businesses (FSB) president Martin McTague says the impact of bank closures on retailers has been huge, resulting in a sharp decline in sales and acute difficulties in withdrawing cash from banks.

He says: “Three-quarters of small businesses located in high streets have been negatively impacted by bank branch closures, and more than a third say footfall has declined as a result.

“Losing the ‘last branch’ in a city or town can be particularly damaging to high street stores because it removes a key reason for shoppers and hurts footfall.”

Maurice O’Brien, a retired local newspaper editor who lives in Tilehurst, Reading, has watched the village lose bank after bank in recent years – Barclays, Lloyds and HSBC have all disappeared. Even the construction association Landelijk, normally industry-friendly, withdrew last November.

In June, NatWest will close, which means Tilehurst will be without a bank. Access to cash will then be available through two post offices on either side of the village, plus two ATMs. Maurice, 73, says: ‘I’ve been a Lloyds customer since the day I collected my first pay package.

‘After I retired eight years ago, the small, friendly branch in Tilehurst proved extremely useful, saving me an exhausting trip to Reading.

But once the pandemic passed, the branch became a phantom operation and it was no surprise that Lloyds pulled the plug – coincidentally on the same day Nationwide closed its doors.”

He added: “The closure of our last bank, NatWest, will be a blow to the 14,000 strong community and local merchants.”

A petition launched by local Liberal Democrats is trying to get NatWest to reverse its decision. In an open letter to the bank, Anne Thompson, Lib Dem councilor for Tilehurst, says the branch closure will create a “banking desert” in Berkshire – with “a chilling effect on local communities, residents and independent businesses.”

Under a voluntary agreement made between the major banks, the FSB and charities (including Age UK), communities such as Tilehurst are eligible to be assessed for a banking hub once notice of the latest bank branch is served.

These hubs are run by the Post Office but are funded by the major banks through an organization called Cash Access UK.

Customers from all banks can use them to deposit or withdraw cash, while representatives from individual banks are on hand on certain days to help with more complex customer queries.

The task of assessing whether a community like Tilehurst is eligible for a hub is the responsibility of ATM network Link. But its decisions are strictly dictated by the conditions set by the banks – for example, the size of the community that has remained unbanked and access to banking services in the immediate hinterland.

Tilehurst, one of 42 branches on NatWest’s latest closure list, was not eligible for a hub – as were other locations such as Rothwell in Leeds and Heald Green in Cheshire, both of which will lose their last bank.

So far, only four hubs have opened while another 43 are promised.

Derek French is a long-standing campaigner for a national network of banking hubs. He is happy that the idea, which he first asked for in the 1990s, has finally been adopted.

But he says the hub setup rules are a mess. “They’re too restrictive,” he says. “There are plenty of cities in this country clamoring for a banking hub, but it’s being denied.”

For example, the presence of a nationwide branch automatically cuts off a community from a hub, even though the building society does not provide core banking services to small businesses such as local retailers.

Communities that have lost all but one of their banks are also ineligible for a hub, though Mr. French argues it would provide a better solution for all bank customers – personal and business.

Mr. French also says that many bankless communities are being fobbed off with new automated deposit services – in libraries or shops – when a human-staffed hub would be a much better solution.

The slow introduction of banking centers results in cities losing their last branch before a community bank can be established.

Only HSBC and NatWest of the major banks have so far agreed to delay the closure of the last bank in the city until a hub is installed.

Legislation requiring banks to ensure the High Street has access to cash is currently moving through parliament at a snail’s pace. Mr French says this slowdown will allow banks to ‘experiment with solutions that are cheaper than hubs’.

When legislation is introduced, the regulator (the Financial Conduct Authority) will probably push for banks to set up more hubs. Whether Cash Access UK can handle it remains up for debate.

But this hub revolution will come at a price: the death of the small town bank branch.