Study finds
A new report from David Black, a banking and financial services insight analyst, predicts that despite some 879 bank branches closing last year, a further 2,400 could still be closed. This represents over 25 per cent of the remaining network of bank and building society branches in the UK.
It also estimates that up to 12,000 branch-based jobs could be at risk from this.
The report, entitled: “The Future of Bank and Building Society Branches in the UK”, was commissioned by The Nottingham Building Society (‘The Nottingham’), which has doubled its branch network to 67 over the past five years. Both Mr Black and The Nottingham are calling on banks and building societies to review their branch strategies to ensure that they are relevant to the needs of people today.
David Black, of DJB Research said: “It has been estimated that 600 branches could deliver effective nationwide customer coverage for banks. Looking at the number of branches the top five banks have today, I estimate that if this strategy was adopted some 2,400 branches could still be closed.
“New research from Which? reveals that 670 branches have already closed this year or been announced to close, and 2018 could eclipse last year for closures.”
“Additional research from The Nottingham for my report reveals 29 per cent of people expect the rate of branch closures to increase ‘dramatically’ over the next three years, and 49 per cent think there will be a slight increase.
“Those banks and building societies with branches need to urgently review their strategies to see if they can make them more relevant to the needs of customers and therefore more financially viable.”
New research (5) from The Nottingham’s reveals 90 per cent of people feel there is still a key role for branches to play, but their role needs to be ‘reinvented’. Only 5 per cent of people interviewed feel branches have no future.
One in four people (25 per cent) believe if their local bank or building society branch closed, they would suffer from ‘financial exclusion’ as they would have less access to advice and financial products and services. Of those people who currently claim to suffer from this, 40 per cent believe that their local bank or building society branch closing contributed to this.
When it comes to what type of products and services people would be happy to use from branches, The Nottingham’s research (5) reveals 53 per cent would use branch- based savings accounts, followed by 32 per cent who would use independent financial advice. Just over one in five (22 per cent) said that they would be happy to use a branch-based whole of market mortgage advice service and 9 per cent would use a local estate agency service based in bank and building society branches.
David Marlow, Chief Executive Officer of The Nottingham Building Society said: “This report echoes what we are seeing on the high street, branches that are solely focused on transactional offerings have a limited future. We have reinvented our branch proposition to offer a far wider range of services. This includes financial advice, whole of market mortgage comparison, savings accounts and estate agency services at selected branches.
“Since doing this, our footfall has increased by around 10 per cent, and our membership has grown, along with mortgage applications and savings balances. Our membership approval rating is currently at 79 per cent, which places us amongst the best organisations in the world from a customer satisfaction point of view.”
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