Barclays Closing High Street Banks

Section62

TheBanker said:

Would those who are keen to retain branches, be happy to accept lower savings rates and charges for counter transactions to cover the cost? Or do they expect to be subsidised by profits generated from customers who don't wish to use the branches any more?

Curiously the building societies - who generally pay better rates of interest than the banks on savings - don't appear to be closing branches at anything like the speed of banks, and last time I checked weren't charging for counter transactions.

How does that work?

TheBanker said:

Or do they expect to be subsidised by profits generated from customers who don't wish to use the branches any more?

If you go down that rabbit hole then are the people using free (and online only) current account banking whilst in credit expecting to be subsidised by current account customers who are in overdraft, or subsidised by the ones paying over the odds for their credit card/loan/mortgage debts?

Picking out one service (e.g. branch banking) from all those provided by banks and arguing that the customers using it should pay for it is a bit of a bogus argument if you don't also think all services should be charged for.

I wouldn't "talk about the elderly". But would say that banks need to get their act together when they still require people to go to a branch for a particular service (as we hear about regularly on this forum) but then shut down all but one branch in a whole county.

WillPS

Section62 said:

Curiously the building societies - who generally pay better rates of interest than the banks on savings - don't appear to be closing branches at anything like the speed of banks, and last time I checked weren't charging for counter transactions.

How does that work?

A few reasons

• With the exception of YBS, Nationwide, Coventry and Skipton they tend to have far fewer branches in the first place, sometimes less than a dozen
  
• With limited scale comes limited ability to advertise like the national brands can, and so the window space a branch has becomes a key part of their marketing
• Customer base skews older and values branch presence higher
• Lack of IT backend investment which would support them 'going branchless', distance banking is often achieved by sending your stuff to a branch. Regular saver fans will know the basic OLB system that most of them still use, and how limited it is compared to most banks
• Small-C conservative governance structure makes it easier to continue doing broadly the same thing than make sharp changes like banks can.
  

Lions_89

My solution is to just open multiple bank accounts at all banks so there is always a branch to access. 

DullGreyGuy

Section62 said:
If you go down that rabbit hole then are the people using free (and online only) current account banking whilst in credit expecting to be subsidised by current account customers who are in overdraft, or subsidised by the ones paying over the odds for their credit card/loan/mortgage debts?

Picking out one service (e.g. branch banking) from all those provided by banks and arguing that the customers using it should pay for it is a bit of a bogus argument if you don't also think all services should be charged for.

I wouldn't "talk about the elderly". But would say that banks need to get their act together when they still require people to go to a branch for a particular service (as we hear about regularly on this forum) but then shut down all but one branch in a whole county.

No, those with free in credit accounts are providing the funds that are then the basis for giving a loan to someone else. If a bank has no savers and no current accounts it has to borrow (more of) the money to lend to others.

Its basic cost benefit analysis... I make money from savers using free accounts because I use that to provide credit cards at 22% interest or loans at 9.9% interest. 

What value is the having a bank branch delivering? The building, if owned, doesn't count as that value would still exist if it were leased to a coffee shop and that would generate other income. You can argue that it used to be a form of advertising but how many people walk the high street these days? So you have a handful of customers that still want/need to use a branch -v- the millions it costs to staff and run the branch. 


Most the posters on here don't actually say why they need to go into the branch nor why going to a post office wouldn't be suitable. The few that do tend to stick to it being their "right" rather than giving any real need. 

WillPS

Lions_89 said:

My solution is to just open multiple bank accounts at all banks so there is always a branch to access. 

Only a solution until the last bank shuts up shop. There are hundreds of small-medium towns which already don't have any bank branches. Only a matter of time before larger towns and smaller cities join them.

Rob5342

DullGreyGuy said:

Section62 said:
If you go down that rabbit hole then are the people using free (and online only) current account banking whilst in credit expecting to be subsidised by current account customers who are in overdraft, or subsidised by the ones paying over the odds for their credit card/loan/mortgage debts?

Picking out one service (e.g. branch banking) from all those provided by banks and arguing that the customers using it should pay for it is a bit of a bogus argument if you don't also think all services should be charged for.

I wouldn't "talk about the elderly". But would say that banks need to get their act together when they still require people to go to a branch for a particular service (as we hear about regularly on this forum) but then shut down all but one branch in a whole county.

Most the posters on here don't actually say why they need to go into the branch nor why going to a post office wouldn't be suitable. The few that do tend to stick to it being their "right" rather than giving any real need. 

That's what puzzles me, It's hard to imagine why anyone would need to go to a branch these days. Even 25 years ago before I had internet banking I'd do virtually everything by phone and post.

Nasqueron

DullGreyGuy said:

Section62 said:
If you go down that rabbit hole then are the people using free (and online only) current account banking whilst in credit expecting to be subsidised by current account customers who are in overdraft, or subsidised by the ones paying over the odds for their credit card/loan/mortgage debts?

Picking out one service (e.g. branch banking) from all those provided by banks and arguing that the customers using it should pay for it is a bit of a bogus argument if you don't also think all services should be charged for.

I wouldn't "talk about the elderly". But would say that banks need to get their act together when they still require people to go to a branch for a particular service (as we hear about regularly on this forum) but then shut down all but one branch in a whole county.

No, those with free in credit accounts are providing the funds that are then the basis for giving a loan to someone else. If a bank has no savers and no current accounts it has to borrow (more of) the money to lend to others.

Its basic cost benefit analysis... I make money from savers using free accounts because I use that to provide credit cards at 22% interest or loans at 9.9% interest. 

What value is the having a bank branch delivering? The building, if owned, doesn't count as that value would still exist if it were leased to a coffee shop and that would generate other income. You can argue that it used to be a form of advertising but how many people walk the high street these days? So you have a handful of customers that still want/need to use a branch -v- the millions it costs to staff and run the branch. 


Most the posters on here don't actually say why they need to go into the branch nor why going to a post office wouldn't be suitable. The few that do tend to stick to it being their "right" rather than giving any real need. 

While I agree with your point on the branches, the days of banks using saver's deposits as the basis for loans are long gone, mortgages and loans are done on the national / international money markets. An average UK mortgage of £189503 (to Sept. 2023) would need 11 people with £17,365 (2024 UK average savings) to fund it. There were ~300,000 mortgages taken out April-July 2023 meaning you'd need 3.3m people with the average savings in the bank just to cover those new loans, let alone the next 3 months, the 3 after that etc. Banks use the fractional reserve banking e.g. loans backed by just 10% of the loan amount in reserves - funded by the interbank lending. 

AstonSmith

Rob5342 said:

That's what puzzles me, It's hard to imagine why anyone would need to go to a branch these days. Even 25 years ago before I had internet banking I'd do virtually everything by phone and post.

There's one reason in the original post - the bank asked OP to visit the branch with a photo ID.

I'm fine with banks closing branches if they have to, but they should really stop making these sort of requests in turn.

TheBanker

Rob5342 said:

TheBanker said:

NB: I know people will talk about the elderly - but my mum is in her mid 70s and manages perfectly well without a local branch (the nearest branch of her chosen bank has always been in the town centre, about 10 miles away). She doesn't have a computer or smartphone, but she's happy enough using telephone banking to deal with transfers and direct debits. If she gets a cheque (rare) she posts it to the bank to deal with. 

I I've heard that argument a lot but it's wearing a bit thin these days. I have two relatives in their 80s, they aren't at all technical but neither of them have any trouble using the banking app on.their iPads. Using a banking app is no more difficult than reading a bank statement.

Yeah. My mum doesn't want to bank online (she could if she really needed to, I've just taught her how to request her repeat prescriptions online). But she is able to do what she needs without going to the branch. She's not been forced into this by the bank - she opened her account at a branch near her old workplace, there has never been a branch near where she lives. And for the decade since she retired, she's never needed to visit the branch. If she did, she would use her free bus pass to go into the city centre, and probably meet up with a friend for lunch while she was there. A nice day out!

The point is that for the elderly, and everyone else, there are lots of ways to bank. Those who don't want to use internet or mobile apps don't have to, they can use the telephone, the post office, or even send letters through the Royal Mail. Very few people will receive their income by cheque - almost all wages and pensions are paid directly into the bank these days. Regular bills can be paid by Direct Debit or Standing Order. Cash can be obtained from ATMs, but the need for cash can be reduced by using their debit card to pay for their shopping.

Also worth remembering that, unlike 20 years ago, many of today's elderly will have had jobs that would have involved the use of some kind of technology. They may not be proficient users of computers in the same way that younger generations are, but the concept of using a computer or smart phone is not alien to many of them. 

Rob5342

AstonSmith said:

Rob5342 said:

That's what puzzles me, It's hard to imagine why anyone would need to go to a branch these days. Even 25 years ago before I had internet banking I'd do virtually everything by phone and post.

There's one reason in the original post - the bank asked OP to visit the branch with a photo ID.

Its easier to just use a bank that doesn't want you to mess around going to a branch. We tried to open a joint Halifax account a few years ago and they wanted us to go to a branch, so we just opened one online with Santander instead. We are with Monzo now who are app only and much better.