Bank branches are quickly becoming a thing of the past. Think floppy disks and fax machines. Consumers manage their financial existence on their smartphones. And they prefer it over queuing up for a teller. At the same time, there remains a segment of the community that is accustomed to swinging by the corner bank, but these tend to be older consumers, a diminishing population.
Today, it has been widely reported that around 34% of physical bank branches in the UK have been shuttered over the past five years. High street banks like Natwest, Lloyds Bank, and the Bank of Scotland have been leading the closure charge.
Overall, in 2019, there were 10,410 bank branches; by 2024, that number had dropped to 6,870. To go back further, in 1986, there were 21,64 bank branches in the UK.
Lloyds Bank, including the Bank of Scotland and Halifax, is expected to close 217 branches in 2025. Other banks are following suit.
Which? provides a nice graph and a search tool if you are curious when your bank branch is being unlived.
Stiven Muccioli, CEO of BaaS fintech BKN301, a BaaS provider, says that banks closing their physical branches must double down on their digital infrastructure to ensure customers remain satisfied.
“Banking will never go back to the way it was. While today’s adults opened their first accounts in their local branches, the next generation will be truly digital-first – interacting with their bank almost entirely online. Customers today expect the same user experience from a bank as they do from a tech platform. If you can’t deliver fast, seamless, digital-first services, you’re out of the game,” said Muccioli. “As banks continue to close their physical branches, they must double down on digital infrastructure to make sure customers are not left in the lurch. Legacy systems are still a huge drag. Banks should change the way they approach innovation, building around the legacy, not fighting it.”
Bank branches are expensive. The cost of real estate and staffing a branch is now viewed as an unnecessary expenditure. This is a good thing for the banking sector, as it can become more efficient and less expensive. They just need to make hard decisions. But if they do not, digital-only banks and Fintechs will further erode their reason for existence. The path is clear. It is just a matter of time.
