I have lost count of the debates on bank closures, with politicians valiantly fighting for the survival of their local community branch. The impact on older people, on disabled people, on small businesses is raised, correctly. The need for choice, for access to cash, for personal customer service, is recognised and agreed, in rare moments of cross-party harmony. The government, too, will make sympathetic noises as they talk sternly about the guidance from the Financial Conduct Authority that banks must follow before they are allowed to hot foot it out of town.
Yet, despite sincere efforts from the local MPs, calls to stop branch closures usually prove frustratingly fruitless. It’s business as usual in the boardrooms, with the regulations dutifully checked, the forms filled, the boxes ticked, then they press ahead with their closure plans anyway. There will be woolly promises of support and training for branch customers on how to use a phone, or directions offered to the nearest post office – which may itself be living on borrowed time.
I can’t completely blame the banks of course, they have bottom lines to meet and shareholders to please, after all. These physical buildings with staff are far too expensive to maintain when there is plenty money to be made in the digital world.
Even RBS, that once proud brand with its roots in the Scottish enlightenment, a company that built their business on the back of a strong local branch network, is not prepared to cut profits to better serve the public that bailed them out when they needed it, and who still own a third of the business.
The branch network is shrinking at an alarming rate. We have seen almost 6000 branches gone across the UK, at a rate of 54 a month, since 2015. It is undoubtedly true that the majority of us use digital banking, at least some of the time. But not all of us can or want to bank this way. Minorities matter, especially when it’s the most vulnerable members of our communities whose voices are most likely to be ignored. When discussing the Leith branch closure, RBS told me 80% of their current account customers used digital banking – but what about the one in five who do not use it, what happens to them when services are gone?
The latest RBS and TSB closures mean even Leith, the most densely populated part of Scotland, will be down to the last high street bank in town. So we know the network is in deep trouble.
When the banks continue to fail their customers, it’s up to government to step in to protect everyone in the communities they work for. The alternative is to sleepwalk into a cashless society and a further deepening of the digital divide. Is it really progress, to force us all into using systems that go against a very human preference for face-to-face services, just because it’s cheaper for the banks? We must take pause before the network disappears and ask ourselves what kind of society we want to be. Is it one which looks out for everyone, or one where markets rule and only the fittest survive.
There are options, if the government chooses to take more meaningful action. As it stands, the regulations are so weak that they can simply be swatted off like irritating flies, while the closure juggernaut rolls on from town to town. There are some powers to protect cash services now, but not bank branches. We need to introduce a community right to physical banking services. We could also consider whether bank branch closures conflict with the Equality Act – specifically Part Three, which states that service providers must ensure equal access to services for all individuals.
Banking hubs are a great option for some places, but the rollout has been woefully slow. Since 2015 we have seen over 636 branches close in Scotland alone – more than 60% – while only 9 hubs have opened so far. The criteria for hubs must be revisited to make it easier to get them moving where appropriate. Yet while a more popular option than post offices alone, they are still a limited alternative to a branch.
Perhaps RBS should take a leaf from their own book and remember the people they serve. On the website it proudly claims “the bank has a history of making life easier for its customers. The bank is committed to serving Scottish communities and putting the interests of customers first.” Time for that commitment to be made clear in bricks and mortar, not just words.
