In the UK, bank branch closures have accelerated in recent years, and the Covid-19 crisis has not helped. To give individuals and SMEs in rural areas of the country access to key banking services, teams from major banks will soon be taking turns in several post offices. What you need to know about this test.
Banking desertification causes concern
Across the country, the closure of bank branches combined with a sharp decline in the number of cash dispensers has had a devastating effect on people who rely almost entirely on cash in their daily lives. Between 2000 and 2019, the major British banks closed almost half of their branches. Among those who have restructured their networks the most are NatWest, HSBC, Lloyds Bank and RBS. As for cash dispensers, their number dropped from 60,291 at the end of 2019 to 55,651 at the end of 2020, according to data from operator Link.
British post offices are now acting as universal counters to avoid "banking deserts". Some banks, like NatWest whose trucks criss-cross rural areas, have even opted for nomadic branches.
Preserving access to cash
From January to June, three pilot projects will be launched at post offices in Ampthill, Rochford and Cambuslang. Other formats will be tested in six other projects. These include, for example, the possibility for shops and pubs to offer free cash withdrawal services, more training in online banking or the introduction of cash deposit machines for businesses within post offices.
Called "Community Access to Cash Pilots", the program will now be examined by the Financial Conduct Authority, the UK's financial sector regulator, and the Treasury, which will unveil measures to promote access to cash this year. If it proves conclusive and succeeds in convincing the players involved, it could be extended to other English towns.
Cost reduction
While partnerships with Post Offices enable us to continue serving vulnerable customers and people living in remote areas, they also reduce costs for banks, which can then concentrate on their online services.
The trend was accentuated by the containment measures put in place following the outbreak of the coronavirus. With some branches closed, customers have turned to other communication channels such as mobile applications and websites. In this area, however, traditional banks face serious competition from neo-banks, which are multiplying their welcome offers and innovative services for opening a business or self-employed account.