Online banking has become even more popular thanks to the pandemic.
Santander has become the latest high street bank to announce it’s cutting back on its bricks-and-mortar infrastructure. By summer 2021 it’s planning to get rid of about a fifth of its UK bank branches. Santander says these branches are just not being used enough to make it worth the running costs of rent and electricity and so on. The reason for this decline of IRL banking is that many more financial services are now being accessed online. This was true before the pandemic, but lockdowns and fear of catching Covid-19 have unsurprisingly exacerbated this trend. Bank branch transactions are currently half of what they were in 2019.
Many of us won’t really notice or care if there are less bank branches around. With 87 percent of UK adults owning a smartphone, digital banking is an easy and convenient alternative. Often when businesses close stores people worry about job losses, but Santander claims it has been able to find new roles for almost all of the 5,000 employees that have been affected. Many of its staff may even welcome the change: their union representative said that post-pandemic a “large majority” of its members want roles that will allow them to work from home more.
However, it’s inevitable that at least some customers will be inconvenienced by the branch closing. And what’s concerning is that the negative impact on these people may be very large, not least because they are disproportionately likely to belong to vulnerable groups, such as being low-income or elderly. These groups are more likely than most to rely on cash, which is now going to be harder for them to get hold of.
They may also end up using fewer banking services in general, which could also have repercussions. For example, if its known they keep their money at home they could become a target from criminals. They could also substitute the lost bank services with less well regulated alternatives such as pawnbrokers or payday lenders. These companies often work out as more expensive than banks because they do things such as charge higher interest rates.
…and who’s getting the bill for all this? Money is such a core part of the economy, and a lot of economic power lies in the hands of those who print it, earn it, and spend it. But money’s not just as a tool for exchange; it’s taken on a value in itself, and there’s a whole economy around money alone…