Railing at the closure of bank branches never achieves much — they still shut. So we need to think more about how banks can provide necessary services in a way that is affordable. This is what every big name is doing now, and it provides us as customers with the chance to shape the future of these businesses.
You didn’t need to be a financial whizz to predict the closure of hundreds of branches after the pandemic. Banks’ profit margins have already been cut to shreds by the legacy of low interest rates; hundreds of closures have been announced already this year.
Out will go the one-size-fits-all approach to branches around the country, and in will come many different types of bank for different communities. Some will be fully automated, some will look more like shared office spaces with cafés and meeting rooms, some will be small booths at railway stations. And don’t worry, some will look like normal branches. But please no, let’s not have an increase in those ghastly “mobile branch” vans that force people to wait for them in car parks once a fortnight.
Banks are about data, the mountain of information they hold about us increasingly defining how they operate. When the pandemic began, many used these details to identify customers who used branches regularly and relied on face-to-face transactions. Then they phoned hundreds of thousands of customers who were identified as vulnerable. They logged the phone numbers of those who they believed needed extra support, and set up systems so they could jump the queue if they called.
While there was moaning about the queues outside banks last summer, in general the big names have behaved well in the pandemic, and customer satisfaction levels have increased.
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Figures from the regulator, the Financial Conduct Authority, show that of those people who use a branch regularly, most can’t use computers, are 75 or over or are in poor health.
The decline in branch usage, though, is undeniable. The proportion of adults who use one regularly fell from 40 per cent to 27 per cent in the three years to 2020. Some, such as Barclays in Birmingham Edgbaston, have as few as five loyal customers. More than three quarters of under-45s hardly ever visit one. We can’t expect banks to stay open for a handful of people. However, the thinking has shifted. The theory was that branches were needed in cities, but urban communities have wholeheartedly embraced digital banking. It is isolated communities that need a physical presence.
Yet if banks are to win the argument on closures, they need to sort out the wrinkles in their systems — and quickly. Some pretend they are more technologically adept than they are. Account-opening, cheque payments, fraud checks and access to cash need to be vastly improved. And banks need to put far more human beings at the ends of phone lines — they can’t always have “significant call volumes”.
Bank branches won’t die, but they are about to get their biggest ever facelift.
@jimconey
