Smart buildings A tenuous link to cash
On 27 June 1967, the first ever ATM transaction happened at a Barclays branch in north London. Since then, they have become a banking mainstay in Britain and around the world. Today, however, there is growing disquiet around accessing them. The fact is that their numbers are falling, and the cost of using many rising – cutting access to cash for some of the most vulnerable people in the country. Graham Mott, director of strategy at Link, which oversees the UK’s ATM network, and provides other transactional services, agrees that ATM numbers have fallen – but sees some very practical reasons. Among them, he says, are bank branch closures. “Every branch has ATMs,” Mott explains. “So, the number of branch ATMs has been declining as a factor of the number of bank branches closing.” In addition to this drop is a decline in the number of pay-to-use ATMs in pubs, the result of either the location closing or the growing use of cashless transactions. Mott says free ATM numbers at supermarkets, train stations and other public spaces remain consistent, contrary to suggestions by some that the financial system is overseeing a wilful decline in access to cash. Going further, he says Link actively seeks to protect access to ATMs, particularly in small towns and villages where there’s one or even none. He notes in the cases that Link has protected ATMs, it might work with partners to subsidise replacement machines, or may even commission them itself. “That’s the model,” Mott adds. “It’s not about the total number of ATMs – although they are not declining as much as some people think or claim. It’s about making sure that they cover the same area.”
Right: ATMs are a means of accessing cash quickly, but their numbers are falling, partly due to branch closures.
4million
The number of ATM interactions on 5th October 2022. Link
736
The number of bank branches closed across the UK in 2021. Which?
34%
Personal Finance Research Centre, University of Bristol
32
The percentage of decline in brick-and- mortar bank and building society branches between 2012 and 2021.
has a mission to provide banking access to whoever needs it, all at a single site. The pilot store-in-store service allows customers to withdraw and deposit cash and access to banking services seven days per week. Right now, however, so-called ‘bank hubs’ are what are attracting the headlines. Funded by some of the UK’s biggest banks, these sites can be the branch many towns, villages and even cities have lost – except they’re home to a group of banks rather than just one. Everyday banking services are supported, with customers having access to their bank’s own experts for professional support. Piloted last year, bank hubs are proving a success, with another raft planned in coming months. French believes they fill a gap that pop-ups simply can’t. “Many customers have a need, when their bank has closed, for a deposit facility,” he explains. “Preferably with a counter plus a known and regular local presence for the ‘one-offs’, where personal assistance is necessary. Pop-ups do not meet this need and there are pathetically few of them.” French adds that NatWest pioneered the concept in community spaces, but, after being suspended during Covid-19, were never restarted as the concept was “acknowledged to be a failure”. Evans says that along with mobile banking – particularly for the most rural communities – banking hubs could fill the void of lost branches and be cost effective for banks too. It’s estimated that the average yearly costs of running a branch in a town with a population of between 15,000 and 40,000 is about £350,000 – similar to the cost of a single hub. This, says French, means banks can share costs and still have a presence. “For many people, the decline of bank branches causes few real issues,” says Evans, something he
argues is basically thanks to remote banking. But for those “left behind”, he warns, some may find their choice of banking limited, causing them to miss out on the right products and services. French concurs. “What is needed is a commitment to 400 multi-bank hubs over the next four years, in larger towns vacated by branded banks.” He believes that would offer towns and surrounding communities banking services they currently don’t have.
Banking on an uncertain future It’s obvious that the way Britain banks is evolving, but a solution that suits everyone remains elusive. Bank vans aren’t it, and while the Post Office is providing a valuable service, it can’t offer everything. Hubs are the most exciting development – but they too are merely part of the answer. As Anderson from TSB says: “All our approaches are about piloting and evolving different types of services, ensuring no customers are left behind.” The fear is that some still are. Speaking in general terms, French says it’s important to “not believe the marketing spin being put on inadequate provision to meet a very real need of small businesses and significant sectors of the personal retail banking market.” His view has, for many years, been a critical one, but that hardly diminishes its importance.
Where banking goes next is looking clearer than it has for some time. Hubs, for their part, are almost sure to become commonplace. Remote banking will remain the go-to route for many, and institutions will continue to battle over technological innovation. One thing, then, is certain: customer needs must be the priority, naturally in the knowledge that not every want and desire can be met. For now, though, while banks are certainly striving to avoid leaving any customer behind, the reality for some might feel otherwise. ●
Future Banking /
www.nsbanking.com
Stely Nikolova/
Shutterstock.com
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