UK (Parliament Politic Magazine) – Virgin Money has recently announced plans to close almost a third of its network, making it the latest lender to do so. A union is urging a reconsideration as the lender argues that the branches affected are no longer handling enough transactions to justify their existence.
The decision to close these branches is attributed to changing customer demand, according to the lender. While this move may result in some staff facing redundancy, Virgin Money hopes to redeploy some of those affected.
Virgin Money’s Closure of One-Third of UK Branches Sparks Debate
The Unite union has reported that as many as 260 jobs may be at risk. This development follows a series of branch closures carried out by high-street lenders in response to cost-cutting measures implemented after the financial crisis.
The banking industry has consistently maintained that the rise of online and mobile banking services has significantly reduced the demand for traditional branch services. In the case of Virgin Money, it will be left with only 91 sites once the closure program is completed, which is expected to be by the end of this year.
The company stated that each store underwent a thorough assessment, taking into account its circumstances. This assessment carefully considered the store’s impact on the local area, as well as the requirements of vulnerable customers and the availability of alternative services, such as free-to-use ATMs and Post Offices.
To ensure the utmost professionalism and clarity, the company meticulously evaluated each store, considering various factors. These factors included the store’s influence on the local community, the specific needs of vulnerable customers, and the accessibility of alternative services, such as free-to-use ATMs and Post Offices.
Virgin Money Decides to Shut Down Almost a Third of its British Branches
The 39 affected sites include Belfast Chelmsford, Enfield, Hexham, London Haymarket, and more. However, the company has revealed: “Each store closing is less than half a mile from the nearest Post Office, which customers can use to carry out day‐to-day transactions, including cash deposits and withdrawals, cheque deposits and balance inquiries, as well as coin exchange.”
Sarah Wilkinson, the Chief Operating Officer at Virgin Money, emphasized that the closure of a store is never a decision made without careful consideration. However, they must acknowledge the changing preferences of our customers in terms of banking. With fewer in-store transactions and an increasing reliance on digital banking for its convenience, they must adapt and respond to this evolving demand.
The primary objective of Virgin Money is to provide unwavering support to both our customers and colleagues. Throughout the review process, we have meticulously taken into account the number of vulnerable customers frequenting each store, considering it a crucial factor in our decision-making. As a result, we are committed to proactively offering personalized and improved care to ensure that any vulnerable customers affected by the changes are fully supported.
Shutting Down Nearly One-Third of UK Branch Network
Virgin Money will explore every possible avenue to retain as many colleagues as possible by offering them alternative roles. In the past, they have achieved remarkable success in transitioning store colleagues to other customer operations positions, as their skills are easily transferable. They are committed to ensuring the smooth transition of our valued employees and maximizing their potential within our organization.
Unite national officer, Caren Evans has responded: “The staff at Virgin Money UK are understandably devastated… Unite has urged the bank to rethink these catastrophic plans to withdraw banking services from communities who very much depend on the skilled and experienced banking staff’’.
According to Unite, over 6,000 bank branches have closed since 2015. This alarming trend has intensified concerns regarding cash accessibility, prompting calls for the City watchdog to utilize its forthcoming powers to prevent communities from being financially isolated. In anticipation of the implementation of new consumer duty regulations on 31 July, Virgin Money has proactively made its announcement.
This week, Nikhil Rathi, the Chief Executive of the Financial Conduct Authority, addressed Members of Parliament. He states:
“What we are saying here is that through every part of their business, from the manufacture of products, the distribution, the pricing, and the customer service support, firms have to think about how they’re placing consumers at the heart of the journey.”