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15 Jun 2018

Revealed: bank branches closing at a rate of 60 a month

Exclusive Which? Money research reveals an alarming trend in the UK retail banking network.
Bank closures

Bank and building society branches are closing down at a rate of almost 60 a month, exclusive Which? Money research can reveal.

Some 2,868 UK retail branches have shut their doors for good since 2015 or will do by the end of this year, depriving customers and local communities of many essential services.

Coupled with a marked decline in ATM numbers across the country, bank branch closures are having a particularly devastating impact on the 2.7 million adults who almost entirely rely on cash in their day-to-day lives.

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Bank closures in Scotland outstrip other UK regions

Which? Money's research - the most comprehensive analysis of of its kind - found that the rate of bank and building society closures is accelerating.

There were 879 bank closures last year, up from 630 in 2016.

We fear that this year could be worse still as some 670 branches have already closed, or been announced to close, by June.

We collected the data from the banks and building societies themselves, and also through our own tracking. All of our numbers have been seen by the firms in question and none of them have raised any issues with our findings.

We've compiled a postcode lookup tool and interactive map to let you find out what's going on in your area in 2018.

Closures were not spread evenly across the UK. Scotland was the worst hit of the UK regions, suffering 368 branch losses in the years over the four year period.

The South East suffered and the South West suffered 361 and 327 respectively.

*Author's note Sept '18: The graphs in this story are not static and have been updated as more bank branches have closed. Our bank branch closure guide contains the most up to date information.

'While the decision is clearly a commercial one for a bank to take,' said Which? Money expert Gareth Shaw, 'it is also crucial that banks recognise the needs of their customers and the communities they serve, before simply shutting their doors - and their customers out.'

Our interactive map allows you to search in your area to see how many bank branches have closed and which banks have closed them.

NatWest, HSBC and Lloyds Bank close the most branches

NatWest has closed the most branches since 2015, with 638 shut or scheduled to shut by the end of this year. This is followed by HSBC with 440, Lloyds with 366 and Royal Bank of Scotland with 350.

Natwest and Royal Bank of Scotland are both part of the RBS Group. Watch our interview with the bank's chief executive to get his take on closures.

In the video, Ross McEwan says that mobile transactions have risen by 78%. NatWest has since confirmed that the actual figure is 73%.

Which?'s research does not capture instances where a bank has closed a branch before opening a new one in a nearby location, or has streamlined two branches into one in the same area.

HSBC said it had completed its 'branch restructuring programme' and had no 'current plans to close any additional branches'.

Lloyds said it continues to invest in its branch network and had expanded its mobile banking and Post Office services.

Why are bank branches closing?

The number of customers using bank and building society branches has plummeted in recent years as more and more people choose to manage their personal finances online.

According to a report published by UK Finance, the trade body that represents banks, 71% of adults used online banking in 2017, representing 38 million people.

Close to 22 million people used mobile banking apps, and there were around 5.5bn logins to apps last year.

Meanwhile, the average branch received 104 visits a day in 2017, compared to 140 per day in 2012. This represents a 26% fall in bank branch visits.

However,there are still many who either cannot engage with digital services or simply prefer traditional forms of banking. And as recent IT meltdowns at TSB and Visa have shown - these systems are not infallible.

Which? has been tracking branch closures since 2015 - crunching the numbers to provide evidence supporting the many stories we hear from customers up down the country, who report that the banking network is crumbling.

A UK Finance spokesperson said:u201cBank branches play an important role in local communities which is why decisions to close them are only ever taken after all other options, like reducing opening hours and staff numbers, have been exhausted.”

The Post Office is also keen to stress that several basic transactions can be carried out in its branches. You can check your balance, withdraw or deposit cash with your bank card. You can also pay in cash and cheques with a paying in slip.

How do cash machine closures relate to bank branch closures?

Bank branches aren't the only thing disappearing from our high streets and villages - ATMs are too. This has created a perfect storm.

As society becomes more and more reliant on electronic forms of payments, our access to cash is diminishing.

Yet, strikingly, some 5% of UK adults still rely almost entirely on cash in their normal lives. Which? is fearful these people will be left behind.

We believe that a robust consultation should take place to ensure the needs of banks' customers are being met before their access to financial services is removed.

(This article was updated at 12.37pm on 15 June 2018 to reflect the range of banking services available in the Post Office.)