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News Article

Is this the end of an era for bank branches?

Published 15 August 2014 by

With the ever-growing popularity of online and mobile banking, the prospect of a high street without bank branches has gone from unthinkable to a real possibility. Although branches have been a staple of the high street for years, we could see them become a thing of the past as customers turn to their computers and mobiles as a way of keeping tabs on their finances.

We’re already starting to see a rise in the popularity of branchless banks like First Direct, and here at thinkmoney we’re noticing that our customers don’t seem to need a local branch either.

But not everyone will embrace this change, so banks are likely to have to come up with more innovative and creative ways to keep the humble branch open for those who need it.

The decline of branch banking

The chief executive of the British Bankers Association (BBA) Anthony Browne recently stated in an article for the Sunday Telegraph that while online and mobile banking is on the rise, branch visits are seeing a decline. Where 2013 saw 18.6 million uses of banking apps every week – double the number in 2012 – Browne said “most” of the major banks were dealing with a 10% drop in transactions made inside a physical branch.

He also gave predictions that there will be fewer branches as time goes by, as many people choose to stay in and bank from home via the internet. As well as this, recent polls commissioned by the BBA found that over three quarters of customers were taking advantage of mobile and internet banking - he said – and using them at least once a month.

So, with so many of us choosing to bank online and on-the-go for ease and convenience, it doesn’t seem so surprising that fewer of us are visiting our local branch. This was summed up by Browne in his article for the Telegraph: “When you can do so much of your basic banking tasks from the palm of your hand or at a cash machine, why bother taking time out of your day to trudge off to the high street?”

However, that’s not to say branches will disappear completely. There are many people who still rely on bank branches or prefer to use them.

What does the future hold?

As technology advances, it’s likely that banks will attempt to integrate these changes to make things quicker, easier and more straightforward for customers. For those who remain loyal to branches there will almost certainly still be options for them to bank the way they want to.

According to the article, banks such as Metro Bank and Handelsbanken are committed to high street banking, which means there should be alternatives to any mainstream branches that close.

It also seems that branches may find new homes in unlikely places – such as supermarkets or other high street shops. For example, Barclays have already opened several branches in Asda supermarkets across the UK. There are even further talks of partnering and expanding into WHSmith and Transport for London.

Speech and fingerprint recognition has the potential to be a game-changer for banking in the future, and cheque imaging (taking a picture of a cheque to cash it in) could come into play relatively soon as well.

While many of us are happy to look to a future where there’s no longer a need for a local branch, millions of Brits still choose to bank this way – so there is still desire for a branch out there.

But, research* we carried out last year revealed that online banking is a priority to a massive 80% of us when choosing a current account provider – even more important than having a local branch. And when just over 40% of us use mobile banking too, it appears that we really are in favour of new technology.

*Consumer Intelligence research carried out a survey of a representative sample of 2,202 UK adults from 31st July – 05th August 2013.