More bank and building society branches closed in the first half of 2020 than the whole of 2019, as the pandemic accelerated consumers’ shift towards online banking, new research shows.
A study by PwC and the Local Data Company found that 1,400 banks and building society branches have closed in the past five years.
During the first six months of 2020, 235 branches permanently closed compared with 222 for all of 2019. Bank and building society branch closures have been an increasingly common occurrence as more users have shifted towards using digital services.
Footfall was further reduced this year through a combination of Covid-19 restrictions, safety concerns and improved digital capabilities.
“While the future of face-to-face banking is unclear, whatever happens, banks need to put customers at the heart of their strategy,” said PwC banking and capital markets leader Isabelle Jenkins. She added that 2020 had already seen more strategic bank openings, with 18 more new sites being opened in the first six months of this year than 2019.
“For example, as remote working becomes increasingly popular, some innovative banks will look to create regional hubs at certain branches to ensure all are purposeful and accessible to the people who need them most.”
Despite such steps there are still concerns such closures will have negative impact for society’s most vulnerable members and how they use banking services.
“Our concern is that bank closures have the potential to disproportionately impact people in vulnerable circumstances,” said Jane Tully, director of external affairs and partnerships at charity Money Advice Trust.
“It is therefore crucial that firms consider how they can best support customers affected by branch closures. This could be through pop-up branches, mobile banks and other suitable alternatives,” she added.
Recently, TSB announced plans to close more than 160 branches next year.