Rise of online banking means branches must evolve
%VIRTUAL-SkimlinksPromo%As more of us bank online or with our mobile phones, are bank branches on the way out?
A lot of our shopping and social interaction has moved online in recent years, and now it seems that most of our banking has gone digital too.
Research from the British Bankers' Association (BBA) and Ernst and Young (EY) reveals that banking transactions worth around £1 billion are taking place each day in the UK, with 77% of bank account holders reporting they use online financial services at least once a month. Just 16% say they've never used it.
Making life easier
Most use online banking to meet day-to-day needs like paying bills, transferring money and checking balances. It has turned out to be something of a godsend for countless 9-5 workers, saving them from a lengthy lunch hour of waiting in a queue at the branch.
More of us are on-the-go than ever and free mobile banking apps can be downloaded in moments, with more than 15,000 people downloading them a day. Perhaps unsurprisingly, many use these apps between 7am-8am on their morning commute; a whopping 167,000 RBS customers alone login at this time.
Contactless cards and SMS balance alerts are also on the rise. A banking customer signed up every 7.5 seconds for payment by text services in the first month of Paym, a service which allows you to transfer money using only a mobile phone number. Read Paym mobile payments service launches.
The sheer convenience of these services is a big factor in their popularity. But what does it mean for our local bank and building society branches?
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How bank branching is changing
The British Bankers' Association argues that the rapid uptake of digital banking can only be a good thing, as it encourages competition between the main banks while handing more power to the likes of you and me.
The trade body also believes in-branch banking is changing as a result; now people head in to their local bank if they are interested in more complex financial services, such as taking out a mortgage, rather than everyday banking chores.
Interestingly, the report states that 2,274 branches have been done up in the past two years, so there is at least some commitment to maintaining a presence on the high street.
Part of this refurbishment is to adapt branches to the digital age of banking so that they can keep up with their competitors. There certainly seems to be a demand for it; just last year Barclays completed two million transactions on its in-branch iPads.
Bank closures
However, bank branches remain a threatened species. Last week HSBC confirmed that there will be 19 branch closures between now and mid-September on top of the 27 branches it has already axed this year. The Royal Bank of Scotland is closing 100 of its banks in the coming year (73 of which are NatWest), while Barclays is rumoured to be closing another 24 banks before the end of September.
Evidently in this new age of digital banking, branches need to evolve in order to survive the cull.
Is it a good thing that more banking is being done online? Do we need an extensive branch network? Let us know your thoughts in the comments box below.
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