There is no doubt that over the last twelve months the COVID-19 pandemic has accelerated an already fast-moving migration to online shopping leaving the traditional high street bereft of once familiar household names, while local, independent, ‘owner-driver’ enterprises struggle on in the face of ever-declining footfall.
High rent or lease agreements, excessive business rates and soaring car park charges are often cited for the high street’s worrying demise and banking is no different. As more and more of us conduct our personal and business financial affairs online and bank’s websites and apps morph into a virtual branch, the need for a physical bricks and mortar presence has become less important. This was highlighted in The Moorlander’s exclusive report some twelve months ago which revealed that in central Devon alone 81% of the banking network had disappeared during the previous five years.
Although international banking giant HSBC resisted the temptation to enforce any branch closures at all during 2020, on the day that the last issue of The Moorlander went to press HSBC issued the announcement that they will be closing 82 branches UK-wide during 2021. This includes the branch on The Strand in Torquay on Friday, 28th May, Forder House in Plymouth a week later on 4th June while the Bedford Square branch in Tavstock will close its doors for the last time on Friday, 25th June.
The statement identified that the shift to online banking was one of the reasons that the bank has decided to shed 14% of its high street branches this year including the three within The Moorlander’s circulation area.
Jackie Uhi, HSBC UK’s Head of Network said. “Stripping out any impact of the pandemic, the number of customers using branches has fallen by a third in the last five years. Nine in ten (90%) of all customer contact with us is over the phone, internet or smartphone, in addition to talking to over 100,000 customers a week on social media.”
The bank’s statement also outlined the long-term future of their branches by setting out plans to change its branch network to reflect local market trends, customer behaviour and branch usage. Following a number of successful pilots, HSBC UK will be evolving its branch network to ensure its branches are fit for the long-term future.
The evolution of its network, which continues to bed down the vision set out in 2020 to become a market-leading digital bank, will lead to further significant investment and the creation of four distinct branch formats, designed to provide local areas with the banking facilities that best suit customer needs, based on detailed analysis of customer behaviour.
The four new branch formats will be:
• FULL SERVICE BRANCH: offering a full
range of services, predominantly based within
large cities and towns where branches see a
broad range of requests.
• CASH SERVICE BRANCH: supporting local
communities that are more cash intensive with
a greater need for access to cash, alongside
simple over-the-counter servicing and the
ability to deal with more complex issues such
as bereavement and Power of Attorney.
• DIGITAL SERVICE BRANCH: counterless
branches providing ‘traditional’ cash and
cheque transactions using self-service
technology, with an emphasis on assisting with
digital technology adoption and product
fulfilment alongside other more complex,
non-standard service requests.
• POP UP BRANCH: a temporary, movable,
local presence that is flexible and agile,
helping customers with ‘in the moment’
queries including help setting up and resetting
online and digital banking, providing digital
education, guidance and customer support.
Work to reformat, refurbish and refresh the branches has already started and is expected to be completed by the end of 2021. The new ‘pop up’ concept branches will be rolled out later this year.
As part of the plans and following a detailed review, the 82 branches earmarked for closure in 2021, will bring the total number of branches to just 511 throughout the UK. The closures will be phased throughout the year
Of the branches selected for closure, HSBC maintain that 81 are within one mile of a Post Office, where customers can carry out day-to-day transactions, two-thirds are within five miles of another HSBC branch and nine in ten are within 10 miles.
Customers of HSBC in Tavistock however, will need to travel 13 miles to Launceston after 25th June if they wish to visit the nearest branch or north to Holsworthy, the next nearest at 24 miles.
The bank is keen to emphasise that a quarter of existing customers are already using the Post Office in Tavistock, which is 400ft away from the Bedford Square branch in Abbey Place and that 99.85% of transactions from the last 12 months can be completed at the Post Office while 92% of customers who have visited in the last 12 months are already registered for digital banking.
Although The Moorlander contacted the manager of the Tavistock branch, Julie Lampshire, for her personal thoughts on the closure and the effect it would have on staff morale, she declined to comment, a spokesman for HSBC UK however offered staff a ray of hope. “We aim to redeploy all customer service colleagues who are impacted by these branch closures into suitable nearby locations.”
Jackie Uhi added: “The COVID-19 pandemic has emphasised the need for the changes that we are making. It hasn’t pushed us in a different direction, but reinforces the things that we were focusing on before and has crystallised our thinking. This is a strategic direction that we need to take to have a branch network fit for the future.
“Making sure we have a sustainable branch network is essential to us, and decisions to close branches are not taken lightly. By ensuring we have the most suitable branch format in each specific local market that we serve, we will ensure that we are in good shape to meet the challenges ahead.”