Deathwatch: High street banks

24 October 2014

bank_sign The biggest banks on the British high street are vanishing with lenders closing hundreds of them in a bid to cut costs and shunt everyone toward online services.

Earlier this week, Lloyds decided that they could downsize by getting rid of 9,000 jobs, which is a tenth of their entire staff. They also plan to get rid of a number of branches, which is becoming a common attitude in the finance world as customers rely less on having to actually stand in a branch and talk to humans.

Other banks in the UK have closed in excess of 350 branches in 2014, which leaves just over 9,000 in total according to figures from the Campaign for Community Banking Services. Barclays are hoping to close around 1,600 branches and cut 19,000 jobs while Royal Bank of Scotland is also ditching tens of thousands of jobs.

According to the British Bankers Association, footfall has fallen 10% year-on-year, while at the same time, the number of transactions being completed online has doubled.

Of course, banks need to start saving money somewhere after many of them have been slapped silly with fines for misselling and the like.

"If we don’t change the fundamentals and improve for our customers then our business will be eaten away," said RBS chief exec Ross McEwan. "That might be through greater competition, increased scrutiny from regulators, or through intensifying innovation, or a combination of all of these."

There's growth in new banks that adopt a digital method, such as Atom Bank and Metro Bank, which are branchless. The banking world is weighing up the threat of new currencies too, such as Bitcoin. These new companies have much lower overheads than trad. arr. banks. And of course, Apple have just launched their own payment service, which is yet another challenge to the banks dominance in finance.

In addition to all this, the UK competition regulator is launching a full inquiry into the banking sector in a bid to create more competition for the old guard.

It goes without saying that some branches are needed, especially for older customers, but consultancy reports have predicted that, in 10 years time, the UK could easily be served by as little as 500 physical branches as everyone migrates to online services. Bad news for bank robbers who will have to ditch the notion of putting tights on their heads and pointing guns at people - they're going to have to start getting computer savvy, and fast.

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