Branch banking — in person is the way forward…surely?

An interesting development in the bank branch debate.

While a number of banks are closing portions of their branch network, two UK towns will be trialing a bank hub, supporting a number of High Street brands. The locations have been selected based on the ageing cash reliant populations and where small businesses struggle to deposit cash. Representatives from a different bank will be available each day for face-to-face meetings and appointments to support transactions and enquiries

A 2019 Access to Cash Review indicated some 9–12 million people would not be ready for a branchless or cashless society.

The Post Office network in the UK have been have been providing ‘Everyday banking’ facilities for some time now, allowing customers from a number of banks to deposit, withdraw or check balances. Speaking with a small business owner recently, they mentioned that their local High Street branch would be closing, so they would either use the Post Office to make deposits, or even turn to a new mobile phone based bank.

Other changes in the High Street are also being driven by OneBank. A bank-agnostic kiosk — being able to act as a branch for every UK Bank, they plan to be in locations — such as supermarkets — so customers can bank at their convenience. Recognising that not everyone has access to the latest mobile phone, access to regular internet or wishes to bank online — I feel this fills a gap that High Street banks are leaving behind.

Open banking underpins the ability for OneBank to operate in this way — using technology interfaces to access multiple bank systems and provide convenience for customers. The convenience for OneBank customers can be delivered through an app if required.

A 2019 Access to Cash Review indicated some 9–12 million people would not be ready for a branchless or cashless society. While this may have changed over the last year, impacts of branch closures will continue to affect communities and businesses around the UK.

Each branch costs approximately £680,000 per year to operate

The business case for branch closures seem sound from a Bank perspective. Lower footfall into branches, more (not all) interactions completed online and a costly branch infrastructure offers great cost savings. Each branch costs approximately £680,000 per year to operate — so consolidation does makes sense from a cost perspective — but does it address all parts of the customer base?

Some banks have introduced video banking services — providing a stop gap between online and in person services. It does make an assumption that individuals have access to the appropriate technology in order to use the service, but it does provide options. It will be interesting to see how this service builds and whether it becomes an extension of call centres.