Since the COVID-19 pandemic accelerated the transition to online banking, UK individuals are visiting their local bank branches less often and less frequently.
Research courtesy of KPMG indicates that 21% of UK consumers haven’t visited a bank branch in the last year, up from 14% year prior.
A significant percentage (16%) have not visited a bank branch in two years. Perhaps even more telling, 64% of consumers wouldn’t care if their bank branch closed.
Just 13% of respondents had “visited a bank branch in the last week compared with 18% in 2022.
As physical banking locations close down, the digital offerings of banks are “becoming increasingly important to consumers. Over a third of individuals (34%) now consider an app that is simple to use as being the most important interaction they have with their bank – up from 25% last year.”
Karim Haji, Global and UK Head of Financial Services at KPMG, comments:
“While the transition to more digital banking is desirable for most, bricks and mortar bank branches are still a vital way for vulnerable members of society to manage their personal finances. During this challenging economic period, they offer a means for individuals to access or deposit cash, a timeless budgeting tool, and discuss their finances with a bank manager face to face.”
As noted in the update:
“Banks must recognise the importance of having access to a bank branch and manage their branch networks sensitively. The banking sector is already exploring innovative new ways to enable customers to access services in person – such as through multi-bank hubs – today’s research demonstrates just how important it is that work happens at a pace.”
Individuals earning at or below the minimum wage “were the most likely demographic to state that they would miss their bank branch if it closed.”
‘Banking hubs’ are still not well
Just 38% of Brits polled said “that they had previously heard of a ‘Bank Hub’ – shared spaces on the high street letting customers of multiple banks deposit and withdraw cash and perform other everyday banking tasks – up from 28% in 2021.”
Karim added:
“Although the rollout of banking hubs has so far been fairly muted, with only a handful of hubs open today, as more banking hubs open across the UK they’ll likely become more well-known and popular as they open in areas which have experienced bank branch closures.”
The factors that would make the Brits polled most likely “to visit a bank hub were if they knew they could help with a particular issue (33%) or if it were close to their home (32%).”
Research conducted, on behalf of KPMG UK “by One between the 27th November and the 4th December 2023, with a nationally representative sample size of 2,000 UK Adults.”