Why bank branch closures are ripping the heart out of high streets

COMMENT One of the wounds being inflicted on the UK’s high streets over the past few years has been the pace and scale of bank branch closures. According to Which?, banks and building societies have closed (or are scheduled to close) 5,233 branches since January 2015, around 54 each month. This matters because branches are at the heart of a local community ecosystem that supports financial wellbeing – inclusion, accessibility and access to information – but also contribute to the diversity and survival of local retail. Those who visit their high street to do their banking will spend time and money there too. Branch closures also have an impact on access to cash. According to the Bank of England, one in five people prefer cash as their payment method and use it daily. A cost of living-challenged world has increased the use of cash to help with budgeting. By implication, local branch closures that remove the convenience of local banking for small retailers to deposit and withdraw cash creates another barrier that just might make them decide that physical retail is “just too difficult”. A better financial future Branches aren’t cheap. The maintenance of a welcoming public environment and the provision of a team of people with the training and behaviours to provide the kind of in-person support that simply cannot be replicated digitally all costs money. But what cost the alternative? As the North East’s largest building society, our purpose is to connect our communities with a better financial future. Our members tell us again and again that they don’t want to be forced to transact purely online. Some are angry that choice is being taken away. For many, local financial access is simply removed. Even those comfortable with transacting digitally frequently state that they want to deal in person when it comes to discussing more complex issues, such as mortgages, investments or bereavement. They want choice to access the financial services they need in the way they want to. So we are bucking a national trend of branch closure. Instead, we have adopted a programme of branch openings. We are creating a blueprint for convenient, cost-effective branches that combine innovation, collaboration and partnership – branches for a shared future. Community partnership We work with forward-thinking organisations, including councils, local community groups and trusts, to provide an alternative style of local branch – one based on community partnership. We are reducing operating costs but still providing access to the full range of branch services in a shared community space. In Stockton-on-Tees, our branch in Yarm Library ensured the continuation of a valued local library service by sharing the costs of a heart-of-town location. Working together has proved mutually beneficial, with each driving footfall to the other by virtue of convenient access. Similarly, in Wooler, Northumberland, we share space with the community tourist information and business incubator hub; in Hawes, North Yorkshire, we have partnered with the community trust’s Post Office, library and volunteer bus service; and in Knaresborough, also North Yorkshire, our most recent launch and fastest-growing branch, we share space with the local library. Next on our new branch list is an agreed partnership with Tynemouth Library in Tyne and Wear. Ensuring local access to financial services remains central to our purpose-powered strategy. As an active member of the High Streets Task Force, it is clear to me that we have a shared vision for town centres and high streets as the beating heart of their communities, with a unique sense of place and a strong identity. We believe towns can thrive if they are supported by innovative, forward-thinking organisations that are authentically connected to their communities. Stuart Miller is executive director of Newcastle Building Society and a member of the High Streets Task Force board Photo © Newcastle Building Society