Following the closure of nearly, 13,000 bank branches in the UK, millions of people have been left struggling to access financial services. According to the consumer group Which?, the UK has lost almost two thirds of its branches in the last three decades. In 1988, there were 20,583 building societies; today, it’s just 7,586.
The group have also warned about the impact these closures could have on consumers, and have made calls for the banks to justify them. For example, it’s estimated that 19% of people in the UK are over two miles away from their nearest branch. And in total, 8% of the population are three miles away.
Communities in Scotland have been hit hardest by the closures, especially those that are less populated. Which? added that, due to the size of the population, communities in the south-west and east of England have been “disproportionately affected”. Certain towns, including Lymm (Cheshire), Sturminster Newton (Dorset), Broseley (Shropshire), and Fishguard (Pembrokeshire), no longer have any branches at all.
In recent years, a number of banks, including Barclays, HSBC, and Lloyds TSB, and others, have been pushing towards digital banking. This is part of an effort to cut costs, and a number of lenders have turned to the Post Office to replace some services. However, Which? warn that Post Office banking services have a number of problems like long queues and a lack of privacy. In addition to this, Post Offices are restricted when it comes to the services they can offer.
According to Ceri Stanaway, who is a money editor for Which?: “The true scale of bank branch closures in recent decades is staggering and has left millions of people struggling to access the vital financial services and cash that they need.”
She added: “For many there is simply no substitute for a dedicated branch and the wide range of services it offers, and many customers now face having to travel long distances if they are to avoid financial exclusion. We want to see banks properly justifying the reasons for closure and taking into account their customers’ needs before shutting their doors – and their customers out.”
But Mike Cherry, national chairman of the Federation of Small Businesses, commented that banks need to do more “to both improve its small business banking offer and make more firms aware of it”.
He went on to explain: “Bank branch closures damage high street footfall, restrict cashflow in local economies and force business owners to waste time travelling to and from their next nearest branch, which could be miles away. Yes, small business owners need to consider alternative ways to bank, but the sheer pace of branch closures is frightening. Firms need time to adjust.”