Nearly a million customers across the UK are at risk of having no major bank branch in their local area in a matter of months, a new study shows.
The bank closures study, by AI and analytics leader SAS, compared the count of open bank branches in every local constituency in the UK in 2020 with the number that closed over the past three years.
Looking at seven of the largest banks in the UK, SAS found those in Ross, Skye and Lochaber in Scotland, Copeland, Central Devon and Gainsborough face a potential risk of having no in-person branches in the coming months if the current rate of closures continues.
The study found that 80 constituencies have lost more than 80 percent of their banks in the last three years, with an annual bank loss rate of more than 25 percent.
The average constituency across the UK saw 51 percent of its banks close in the last three years, with a branch loss rate of 17.3 percent.
Louise Potts, head of banking and customer advisory at SAS UK, said: “Online banking has revolutionised personal finance, making it easier for customers to carry out day-to-day transactions whatever their location.
“Analytics and AI have also personalised the online experience, improved responsiveness and helped with fraud prevention, but it’s not always a viable option for everyone. In-person banking services provide crucial services if you’re struggling to access the internet or find a solution online.”
Customers in more metropolitan areas such as Leeds East, Gateshead, Cardiff West and Bristol South are also at risk of being without an in-person branch in the next year if closures maintain their current trajectory, according to SAS research.
There are also a number of metropolitan areas holding onto one branch, including Derby North, Sheffield Hallam, Kingston upon Hull North and Dagenham and Rainham.
The 10 areas most likely to be ‘bankless’ in 2024
- Ross, Skye and Lochaber, Scotland (18,819 people per branch)
- Argyll and Bute, Scotland (8,626 people per branch)
- Dumfriesshire, Clydesdale and Tweeddale, Scotland (800 people per branch)
- Caithness, Sutherland and Easter Ross, Scotland (188 people per branch)
- Copeland, England (39,000 people per branch)
- South Down, England (123,121 people per branch)
- North Ayrshire and Arran, Scotland (20,320 people per branch)
- Central Devon, England (47,612 people per branch)
- Tewkesbury, England (112,255 people per branch)
- Gainsborough, England (98,796 people per branch).
Most of the areas expected to have no open branches within their constituency in the next year are rural and have relatively low population density.
For instance, Ross, Skye, and Lochaber, currently with four remaining branches, exhibit the lowest population density among the area offices in the Highlands and Islands region, with just four people per square kilometre.
However, SAS found it also has an older age profile, meaning that people are likely to require in-person services more.
Ms Potts said: “Banking hubs have become a new alternative for those who don’t have access to a traditional branch.
“Owned by Cash Access UK and run by the Post Office, banking hubs provide access to a number of high street banks, giving people the option to deposit, transfer and withdraw money from most major banks – all under one roof.!
However, she noted: “Ultimately, everyone needs access to banking. Our research highlights the areas that may need support, whether it be technological advancements to improve internet access, or consideration for the opening of a new banking hub.”
