You know those people on the telly that keep their money under the mattress? Well, such extreme measures are becoming an increasingly more dependable option amid an ongoing erosion of physical banking.
I last discussed Royal Bank of Scotland branch closures back in December last year, but alas, they have come back to haunt us yet again.
Back in December, RBS announced that it was looking to close 52 bank branches in Scotland that serve rural communities, and a further 197 NatWest branches.
Now, it’s set to shut a further 162 branches across the UK in a bid to cut costs as more customers move online and away from face-to-face banking.
This means that, since March 2017, RBS has announced a shocking total of 569 branch closures.
The appalling news comes just weeks after Lloyds announced it too was shutting 49 branches.
RBS said its decision was made because it believed a growing number of customers were now using online banking rather than high street branches.
It pointed to figures suggesting that the number of its customers using branches across the UK had fallen by 40 per cent while mobile transactions had increased by 73 per cent over the same period with five million customers using its mobile banking app.
The worst figure out of all of this?
A massive 792 jobs will go as a result with staff being offered voluntary redundancy, but with 52 branches across Scotland due to close—including Renfrew, Bellshill, Stepps, Tannochside and Kinross—it is yet to be made clear exactly how many will be made redundant north of the border.
Campaigners are now calling on RBS to honour its local commitments, especially to those communities that depend on the affected bank branches and will now be forced to undertake lengthy journeys if they don’t want to go online.
To avoid that, the bank is trying to persuade customers to start using online banking and its companion smartphone mobile banking app by creating a special taskforce to help customers learn digital skills.
However, surely the bank has to recognise that not everyone wants to do their banking digitally and may just prefer to pop into their local high street branch, particularly older customers?
Undoubtedly, the move is set to change the face of UK banking forever and could signal the beginning of the end of managing finances over the counter.
The timing is interesting given that RBS is not the only one to face the wrath of savers this week. TSB has been dealing with seismic problems following an IT switchover with lots of customers complaining that payments had failed to complete, with others raising concerns over standing orders that hadn’t been paid from their account.
Yet more found that they had seen money debited from their account for standing orders they had previously cancelled.
Problems began after TSB shut down services for two days to move customer data from former owner Lloyds to a new IT system managed by its Spanish owner Sabadell.
As soon as the new system was switched on, customers reported failures which have continued to persist.
In an attempt to resolve the issue, TSB has said it will waive overdraft fees this month and offer a five per cent raise in its savings rate after millions were locked out of their online accounts.
Digital banking may have its benefits for those who want more flexibility and lead increasingly busy lives, but the TSB situation demonstrates just how easily problems can arise—and in many cases we’re not talking mild inconvenience, but serious financial loss and even deprivation.
RBS should be watching very carefully indeed.
Mike Coupe, the chief executive of Sainsbury’s, must have been mortified to learn he’d been caught on camera singing ‘We’re in the Money’ before an ITV interview on the supermarket’s proposed merger with ASDA.
However, new figures show the two retail giants are actually lagging behind competitors in terms of sales.
Both Sainsbury’s and ASDA reported slower sales growth in the last three months compared to rivals Tesco and Morrisons.
ASDA recorded a 1.4 per cent growth in sales with Sainsbury’s managing just 0.2 per cent. In contrast, Tesco enjoyed a 2.1 per cent increase while Morrisons came out on top with 2.2 per cent.
Nevertheless, it’s not all doom and gloom for the retailers. The merger will see them take nearly a third of the market share (31.4 per cent), beating Tesco’s 27.6 per cent.
Mike Coupe said he expects Sainsbury’s to make an extra £500million profit from the transaction. No wonder he’s laughing all the way to the bank.
It will be interesting to see what effect the £10billion deal has on the wider retail sector. Politicians have already called for the competition watchdog to investigate the merger due to fears it may impact jobs and see prices rise for shoppers.
However, intervention from the Competition and Markets Authority (CMA) could also result in the companies being forced to sell off stores in areas they dominate.
Sainsbury’s has suggested the move will see it slash prices, but there are worries this may come at a cost to suppliers. The true impact of this monumental deal remains to be seen.
Laugh
A Highland hotel has found itself in a spot of bother with the local council following what it described as a ‘quirky’ marketing campaign.
Achnagairn Hotel, on the outskirts of Inverness, wanted to promote the fact that its restaurant, Table Manors, had been awarded 2 AA Rosettes.
All well and good, but the campaign saw projectors light up landmarks with the near-the-knuckle acronym of WTF. The three letters were also to be flown over the city while a 20-mile radius was to be covered with leaflets and posters.
The hotel owner said unconvincingly that the idea was to encourage people to think “Where’s The Food” or “Wonderful Tasting Fare.”
Unfortunately the council failed to see the funny side and is threatening to charge back the cost of cleaning it all up.
Weep
On the back of the RBS announcement, I was concerned to see LINK announcing plans to cut the fees paid by banks to UK cash machine operators.
While there is declining consumer demand for withdrawing cash from holes in the wall, consumer rights group Which? thinks the move will lead to operators closing many free-to-use ATMs.
The advent of payment methods such as contactless has made paying for goods and services extremely easy and convenient—and the carrying of cash not such a necessity—but I do think the move could hit rural communities especially hard if they lose access to local ATMs.
It’s bad news, especially for those remote areas which are facing losing their local bank branches in the latest round of cuts.
