UK faces ‘cash deserts’ as bank branches are –
Consumer group’s stark warning of high streets without banks or ATMs
ATOXIC mix of bank branch and cash machine closures could soon create cashless ‘deserts’ across swathes of the country.
This warning, from consumer group Which?, comes as the major high street banks, led by Lloyds and Royal Bank of Scotland, continue to close branches in droves.
Already 300 branches are earmarked for the chop this year, following nearly 900 closures last year – one in ten of the total network.
On top, a change in the way cash machine operators are remunerated could see thousands of ATMs axed as they become unprofitable to run, leaving some communities – especially rural ones – cashless. A decision on the new charges ATM suppliers can levy on rival banks whose customers use their machines is imminent.
Such a frightening withdrawal of banking facilities from the high street has caused hundreds of readers to contact The Mail on Sunday in recent weeks to complain about the loss – or imminent closure – of their local branch.
This followed our interview last month with Jane Howard, head of retail banking at Royal Bank of Scotland, in the wake of her controversial decision to order the axing of 259 branches across both its RBS and NatWest brands. She said the closures were driven primarily by a desire among customers to bank online.
But readers accuse Royal Bank of Scotland and other mainstream banks of pandering to dividend hungry shareholders rather than the needs of customers and forcing people to bank online, even when broadband coverage is at best patchy. They also believe the banks are helping kill the high street and ignoring the banking needs of the elderly and small businesses who prefer – or need – to use a branch. For the past two decades, The Mail on Sunday, alone among national newspapers, has highlighted the carnage caused within communities by bank branch closures. In April 2000, we exclusively reported on Barclays’ alarming decision to close 172 branches on one single day. We have also long campaigned for shared branches as an alternative to banks withdrawing en masse from communities. The idea has been continually pushed away on competition grounds.
The latest wave of closures paints a picture of a future where communities become ‘cashless deserts’. Gareth Shaw, a money expert at Which?, says: ‘There is no doubt the amount of customer footfall at bank branches has shrunk. But there are still millions of people who are reliant on cash rather than plastic and rely on their local bank branch.’
He says those hardest hit by the march towards cashless deserts include small businesses which are cash generative and cannot afford to move to a card payment-only world – as well as people who do not want to ‘engage’ with online banking, either because they do not trust it or because the internet reception where they live is poor.
One businessman increasingly frustrated by the cost-cutting focus of the banks is 58-year-old Duncan Passmore. After a successful career in international banking, he now teaches t’ai chi and qi gong in Rutland and Leicestershire.
But his bank NatWest is making life hard for him and his company Tai Chi Rutland. He says: ‘When NatWest closed my local Oakham branch in the spring of last year, it was a major inconvenience. I run a business where customers pay by cash or cheque and I need to bank this money on a regular basis. It has meant me travelling 11 miles to Stamford to do my banking.
‘Now NatWest has said it is shutting that branch in May, which means I am going to have to travel even further to Leicester, Melton Mowbray or Peterborough to bank my takings.’
Although NatWest has suggested he use his local post office, he says the queues in the Oakham branch are awful. It also takes longer for his takings to be credited to his account. He adds: ‘The banks are treating us like pariahs. They are creating a real problem, a social one.’
Frances Latty is furious that her Lloyds branch in Bingham, Nottinghamshire, is due to close in May. When it goes it will leave the community bankless – the NatWest branch shut last year.
A former prison service administrator, 72-year-old Frances told The Mail on Sunday: ‘I am furious. The bank tells me to do my banking online but with today’s ever-increasing cyber-crime, I would not trust it as far as I could throw it.’
Royal Bank of Scotland says branch usage countrywide has fallen 40 per cent since 2014. Lloyds says its decision to close branches is based on customer usage.