The Death of the High Street and what it means for the modern bank
Sophie Biber, London 06/03/19
Fintech Society, King's College London
In the last three years, almost 3,000 bank branches have closed across the UK. Around 60 close each month now, with numbers continuing to accelerate. As people switch to online banking the need for physical branches is decreasing. This is happening in almost every area reliant on physical locations. New Look, a popular clothing brand, announced 60 stores shutting this year. Another UK fashion brand, Next, said that “2017 was the most challenging year we have faced for 25 years”. With all these branches closing at such a speedy rate, it’s difficult to accurately predict how banking will look in the next 10 years.
In fact, one of the few banks not currently preparing to close more branches is Nationwide. They are giving their 670 branches the full makeover in order to attract their members. Mr Garner, the chief executive of Nationwide, scoffed at Monzo’s 600,000 monthly customer signup saying, “You can download as many apps as you like, but when you ask someone the question, ‘who do you bank with?’, they will give the name of where they pay their main income.” Although there are new flashy banks offering top range online services, people still trust the household names with the majority of their money. The company has also recently announced a mass increase in their budget for IT with a plan increased spend to £4.1 billion in the next five years.
In comparison, Lloyds have now closed around 360 of their branches, RBS 350 and HSBC around 440. With the majority of banks turning their focus on their online services, we’re losing more than just the branch. Not only have there been mass redundancies, but we also lose the free cash point. More and more shops are being forced to move to card only which can add additional costs through bank charges. It’s unknown exactly how many more ripple effects we may have from the loss of bank branches. Even the simple act of giving spare change to the homeless sitting on the street might disappear with the loss of change.
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