Banks and customers at odds over impact of branch closures in the UK
The closure of bank branches is not seen as a major concern by those working in the industry, despite the public continuing to express worries about the impact, new research has found.
The findings from CRIF, Europe’s leading provider of consumer and credit information, show that a quarter (27%) of senior professionals working in banking don’t see the ongoing closure of bank branches as a challenge for their business.
The views contrast with those of the public, where six in ten (60%) consumers say that closures have made it harder for them to speak to a member of staff when they need support. This is broadly similar across all age brackets too, with over half in all groups feeling this way (57% of 18-34s; 58% of 35-54s; and 64% of those aged over 55).
Overall, more than half (55%) of Brits believe banks now put less importance on serving and looking after their customers compared to five years ago. Similarly, a third (35%) of people say it has become more confusing when trying to get what they need from their bank or provider because, rather than being able to speak to someone directly, they often need to find it themselves on the bank’s website or through an app.
As well as concerns over the ability to access in-person support, one in five (21%) UK consumers say they are worried about the continued closure of bank branches over the next five years.
While this data suggests branch closures could impact customer satisfaction and, therefore, loyalty, for those working in the banking sector, closures rank below other challenges their business faces, with increased risk of customer fraud (93%); increased competition in the sector (84%); and increased regulation (83%) ranked as the biggest issues.
Since 2015, over 6,300 bank and building society branches have closed, equal to around 53 per month, with over 370 closures planned for 2025.
Sara Costantini, regional director for the UK & Ireland at CRIF said: “Financial services have changed rapidly over the last decade, as people continue to embrace digital banking and manage multiple aspects of their finances online.
“The knock-on impact of this has been the reduction in physical, in-person banking services. While many working in the sector don’t see this as a major challenge to their business, bank branch reductions are continuing to fuel concerns over the quality of customer services and what further closures may mean for the future.
“The findings highlight the difficult tightrope that banks now need to walk, balancing the need to ensure their digital services remain cutting edge and up to scratch, which has become a competitive area for so many, without losing the personal touch that more traditional services offer.”
The new data forms part of CRIF’s upcoming 2025 Banking on Banks report series. The first report, to be published in June, will identify the biggest changes to the financial services sector across Europe over the last decade, drawing on the views of both consumers and senior financial services professionals working in the UK, and serving European markets.
CRIF’s second report, expected later in the year, will look at the trends