Bank Branches To Disappear By 2025?

Nearly 70% of financial institutions expect brick and mortar banks to be completely gone within the next 3 years

March 11, 2022
Bank Branches To Disappear By 2025?
Ian Lewis

Written By

Ian Lewis

 
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A new survey of European banks has shown that nearly 70% of financial institutions expect brick and mortar banks to be completely gone within the next three years.

The survey — carried out by the Economist Intelligence Unit (EIU) and Temenos, involved many of the largest banks across the continent and comes amid mass closures already taking place.

It comes as the banks across Europe are expanding their online banking offerings, with over a third of the banks looking to sign up or outright purchase emerging fintech firms to bolster their options.

UK bank branch closures summarised

In the UK and across Europe, the acceleration of bank branch closures is being attributed to the impact of the COVID-19 pandemic, which banks are claiming has caused customers to transition more to digital banking after the difficulties of lockdown.

However, branches have been closing rapidly since 2015. A survey from Which? at the end of 2021 showed that almost half of all UK bank branches had closed or been scheduled to close dating back over the last six years.

This accounts for over 4,700 branches closing, many of which have been left empty since they closed too.

There are fears that banks are forcing the digital transition onto customers and using the pandemic as an excuse. Closing branches will save banks a lot of money, helping to increase the profits of banks that are already seeing positive financial results as the UK economy rebounds after Coronavirus.

There are also fears that the move to digital banking will cause problems for people who are unable to access digital services, including the elderly or those who live in remote locations with poor internet access.

The future of banking

Various options are being explored to help customers retain access to in-person banking services, so should the traditional branch disappear from the high streets there should still be options for those customers who need physical banking options.

One of these is the Post Office, which has renewed its contract to offer basic banking services within its own branches for most of the UK’s top banks.

Another idea being explored is that of shared branches — where one unit will host a different bank each day on rotation so that customers at least have access to their bank one day a week. Pilot tests are currently underway and may be rolled out further if they are successful.

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