Will banks completely disappear from our high streets?

Is your local bank shutting down this year? Or maybe it’s gone already. We examine what’s happening to your local high street.

Has your local bank branch closed? If it has, you’re not alone. A staggering 5,668 branches have shut since January 2015: more than half of the branches that were open since that time. That’s around 54 branches closing each month.

The NatWest Group (including NatWest, Royal Bank of Scotland, and Ulster Bank) has closed 1,314 branches – more than any other banking group. Lloyds Banking Group, comprised of Lloyds Bank, Halifax, and Bank of Scotland, has axed 1,019 sites. And Barclays has shut down 1,098 branches, the most of any individual bank.

Banks have been a staple on the British high street for decades. So why are the branches disappearing in front of our eyes? And how many more are scheduled to go?

Why are so many bank branches closing?

Not enough people visit the branch

Many banks point to reduced branch visits, in favour of online and mobile banking, to justify their branch closures. Around two thirds of UK adults used online banking and over half used mobile banking in 2020. Meanwhile, in 2017, the average bank branch received 104 visits a day, compared with 140 in 2021 (when the latest data is available to). It’s a fall of 29.5%.

But, saying that, it is only a fall of 26% fewer people visiting a branch versus half of all branches closing. Could this be more to do with reducing overheads than responding to customer needs?

It’s clear that plenty of people still use local banks for personal and business use. Not everyone can get on with digital banking, and it’s a particular challenge in rural areas, where there’s poor broadband and mobile coverage. Having enjoyed the presence of our Howden branches in many communities across the UK, it’s clear that there is still very much a need for that in-person, human contact, especially when it comes to sorting out your finances.

Are there more bank closures planned?

NatWest Group has closed hundreds of Royal Bank of Scotland branches in England and Wales, as it now allows customers of that brand to bank in a local NatWest branch. Mergers in the last decade have also led to closures; Yorkshire Building Society merged with Barnsley, Chelsea and Norwich and Peterborough building societies between 2008 and 2001. So, with multiples in the same town, this led to closures.

In 2023 so far, 495 branches have closed, and a further 152 are scheduled to go. This will continue into next year too, with another 78 closures planned in 2024. So, does that mean you’ll be forced into online banking?

Strong campaigning and protections are coming into place to stop people being forced to do their banking digitally. The Financial Services and Markets Bill aims to ‘strengthen the United Kingdom’s financial services industry, ensuring that it continues to act in the interest of all people and communities.’ Part of this includes making sure people can access their own cash with ease.

Major high street banks including Bank of Ireland, Barclays, Danske Bank, HSBC, Lloyds Banking Group, Nationwide, NatWest Group, Santander, TSM and Virgin Money have agreed to fund shared banking hubs on a voluntary basis.

Since the start of 2022, these banks tell the cash machine network Link when they’re planning branch closures, so it can assess whether that community needs a hub and the extra services it provides. Communities can also reach out to Link directly, for assessment.

Another solution deployed by NatWest and Barclays is a community banking approach. Barclays offers ‘Barclays Local’, where customers can find in-person support in community places such as town halls and libraries, plus mobile vans. Whereas NatWest Group opts for ‘Community Bankers’, professional staff who travel to areas to meet with customers in libraries, council buildings or leisure centres. These options allow people to get face-to-face assistance.

Attentively, you can do most of your everyday banking tasks in your local Post Office branch. The fee-free service allows both personal and business customers to access their accounts, pay in cash and cheques, withdraw money and check your balance. Barclays, HSMC, Lloyds, Nationwide, NatWest and Santander are all providers whose accounts can be accessed at the Post Office.

Does the high street have a future?

Of course, it’s not just the banks that are closing. Wilko, Woolworths, BHS have all faced financial woes and been forced to shut shop. There are many more retailers dialling back their high street presence, like Boots, Clintons and Argos. And we mustn’t forget that independent businesses have been through the wringer, contending with the Covid pandemic and rising costs, all while competing with online behemoths.

So, is the high street dying? Experts think it’s not too late, but warn people not to be ‘unambitious’. It’s no secret the high street isn’t changing, and businesses must adapt to new consumer spending habits.

Post-pandemic, and hopefully as we recover from the cost-of-living crisis, could it be that people are looking to get out and about in their local area, rather than be forced to only shop online?

High street businesses can offer an experience that websites can’t, whether that’s the ability to try on clothing before you buy and saving you the chore of the return, live music events, or book readings, or simply just more personal customer service. There’s also a push for combined community spaces; old Poundland shops have been transformed by campaign groups into hubs featuring a cinema, café, bar, and local food vendors. With internet access, these places offer remote workers a change of scenery, community groups a space to meet, and encourage connections between local business owners.

Howden is here on your high street

For some things in life, speaking face-to-face is just better. And insurance can be one of those things. At Howden, we know how valuable it can be to speak to an expert in person. That’s why we have over 200 local high street branches, and plans to open up more branches.

Find your local branch, and pop in or give us a call. We’re here, however you prefer to speak with us.

Sources: Which? CityAM, Telegraph, Wired