The process of going into a bank to process checks, cash in coins, seek advice, or to ask for a loan, is increasingly becoming a thing of the past for many who once used such the physical branch. For millennials, many will never gave visited a branch at all. This is the context of the growing alternative of digital banking services.
One high income country that has seen a high number of bank branches disappear from the high street is the U.K. Some branches reportedly see less than 10 customers per day, as more and more people gravitate towards using online services. There are demographic and social class differences within the general trend, however, with the elderly more reliant upon the use of physical bank branches, and branches receive more visits in lower income areas.
Banks operating the bigger cities generally maintain a physical branch presence, often closing smaller sites and operating larger premises. These types of banks will continue to offer face to face e customer consultations. However, in smaller towns the branch is proving an expensive addition to many players in the banking sector.
This week Royal Bank of Scotland, which is part owned by the British government, announced it will close 54 branches in Wales and England by January 2019, shedding in the process 258 jobs. The bank has already begun the process if closing 162 branches. The bank has said that the reason for implementing more closures is because branch use has dropped 30 percent since January 2017.
Derek French, the former director of the Campaign for Community Banking Services (CCBS), told The Guardian that his prediction was that “by the end of next year, all the RBS[-branded] branches in England and Wales will be closed … they are not viable as a separate, standalone unit. South of the border, NatWest is their brand.”
Other leading banks are undertaking the same pattern of closures, albeit at a more steady rate, as the numbers of people using digital banking services increases. Furthermore, there is a growing challenge from digital-only banks, which are positioning themselves to challenge the monopoly of traditional high street banks.
