Loss of bank branches can signal more woe for the vulnerable

22nd September 2015

It’s getting a little worrying, hearing about the number of bank branches which are predicted to close over the next five years, leaving some areas without a single local bank.

It’s all very well saying that they are not needed because people will do things online, but that excludes the millions who cannot or don’t want to go online. In fact, even those who do bank online could find the unintended consequences mean they have problems too.

At least those who currently receive paper statements will be secure in the fact that they have a permanent record. For those who don’t, they may find the loss of a local bank means a big round trip if they need a copy of a statement to present to verify their income and outgoings to get a mortgage.

Many people believe that just printing off a statement and taking that in will do. Not so – statements printed at home are not always accepted as legal documents.  Though some banks will accept them, seven out of 12 high street banks Keep Me Posted surveyed said official paper statements were necessary and two more would accept an online print out only if it had been certified – guess where – in the branch. No use if the branch has gone…

We have heard cases of people whose mortgages have been delayed while they sought to get paper copies and just recently of a young woman in her twenties who had a problem trying to sort out renting a new flat as the landlord required a paper statement (she banks online).

Removing a bank branch may be short sighted anyway – according to a new study from business consultants McKinsey, the lack of a physical presence can mean customers move their money elsewhere. Indeed the newer “challenger banks” are taking the opposite approach. Metrobank, just five years old, has expanded tenfold, from four initial branches to the brink of unveiling its 40th.

This push towards paperless means the local branch is becoming more important to those who want and, in many cases, need, that personal touch when dealing with their finances. Lots of people like to go to their bank to pay bills, so they know exactly what’s going out of their account, and trust the transaction. Removing this option is putting yet another obstacle in the way of some of the most vulnerable.

Judith Donovan