Could shared banking hubs keep the high street bank going for a few more years?
Image source: Tim Mossholder/Unsplash.
Hundreds of bank branch closures have led to the point where the regulator is now calling on banks to reconsider closures and, according to the Financial Times, this could go as far as to block future closures.
In response, The Mail on Sunday reported that the UK’s biggest banks are discussing creating a new generation of shared banking hubs in order to continue providing banking services for the most rural communities.
The initiative is similar to what the banks have done with the Post Office, allowing customers to access cash and banking services through its 11,500 branches.
Unsurprisingly the sticking point for setting up shared banking hubs is said to be the cost, which The Mail on Sunday said was around £100m for 200 sites over five years, but which could be far higher should the number of sites increase.
Between 2000 and 2019 British banks closed almost half of their branches, and there are 500 towns across the country with just one bank branch left.
Those closures have only increased over the last year as Covid-19 accelerates banks’ cost-saving plans.
Repeated surveys have predicted that bank branches will soon disappear and cut off hundreds of thousands of people from their banks and access to cash.
Meanwhile, digital banks like Monzo and Starling Bank are scooping up millions of more tech-literate customers without having to deal with the huge cost of operating a branch network.
Could these shared banking hubs allow incumbent banks to cut costs and preserve access to banking services for a few more years? We’ll find out soon enough.