Analysis
By Scott Wright
SINCE the financial crisis around a decade ago, a prominent and recurring theme in the story of the UK’s major banks has been one of continuing branch closures.
A combination of the need to shore up battered balance sheets and the growth of digital banking has resulted in hundreds of branches closing their doors for the final time.
It has been a painful process which has led to thousands of job losses and, in some areas, customers being cut off from banking services. And it is an ongoing process, too, with TSB swinging the axe this week on more than 80 branches across the country.
Big names such as Royal Bank of Scotland, Lloyds Banking Group and Virgin Money, the new name of Clydesdale Bank, have justified the closures by saying branch footfall has been steadily falling while pointing to the growth in the number of people who use their digital apps.
Such arguments, however, overlook the important human role branches play (as well as the fact that small businesses continue to need access to cash services).
It is a point which was raised convincingly yesterday by Paul Denton, chief executive of the Scottish Building Society. Mr Denton, who spent 25 years of his career with Royal Bank of Scotland, knows the historic mutual cannot be compared with the likes of Royal in scale. But he makes a compelling case as to why branches should continue to have prominent role in the operation of banks and building societies.
More and more people may be banking by mobile app, but that should not diminish the fact that many customers still visit their branches regularly. That many people prefer to do their banking in person, and that small firms do need to access cash, are facts banks and building societies would be ill-advised to ignore – no matter what their statistics on digital trends are telling them.
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