For many consumers and smaller businesses dealing with the bank has become a nightmare, writes Alex Brummer.
Branches are disappearing from local high streets so fast that they are creating financial deserts.
This is devastating for the elderly, the infirm and small businesses which are still part of the cash society.
More than 5,000 bank branches have shut up shop since 2015 leaving customers with little choice but to travel several miles to their nearest branch or try to navigate unhelpful phone lines, with the possibility of being kept hanging on for 30 minutes or more, or go online.
Given that many of the closed branches are in rural areas or smaller towns, that in itself is its own problem because of the unreliability of Wi-Fi signals and the slowness of connections.
That is why it was such a relief that the first action of Debbie Crosbie (formerly of TSB) when taking over as chief executive of mutually owned building society Nationwide was to pledge that for two years at least the branch network would remain intact.
Indeed, Nationwide is engaged in refurbishing many of its 700 branches and has made an effort – started in the pandemic – to divert phone calls from a central switchboard to local branches where the colleagues manning the cash desks know the customers.
The devaluation of branch banking among the high street banks is all about maximising profits.
Even on high streets and in communities where they remain open the staff are much less expert than they once were. Simple concepts such as ‘family trusts’ are unknown to staff and it is impossible to find qualified help.
As for online banking, for many less technically inclined people navigating the security checks has become a complex task. But failure to do so raises the fraud risk. In an age of anonymity, poor customer service and automated switchboards, customers have become second-class citizens for most banks.
Those financial groups such as Nationwide and the Swedish competitor Handelsbanken UK – present in many towns – offer a great other choice to the big four players: HSBC, Barclays, NatWest and Lloyds.
Newcomers, such as Metro Bank, have demonstrated that a combination of new branch technology, seven-days-a-week opening and longer hours can be hugely attractive.
The big four need to be careful what they wish for. As quickly as they adopt online banking, their artificial intelligence, code writing, tech and mobile apps are never going to be as good as that of the Silicon Valley giants. Apple and others are moving on to traditional bank territory.
Apple has launched a buy-now-pay-later (BNPL) app and divorced from its former banking partner Goldman Sachs, which provides billions of consumers with an alternative to traditional credit card finance.
Amazon offers its ‘market place’ businesses smoother access to credit.
Wise offers customers much cheaper foreign exchange services.
Unless they re-invigorate branches and start offering services again, traditional banks could render themselves increasingly obsolete.
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