Region set to lose 264 banks in six years in cashless society
- Credit: Nick Butcher
By the end of the year the East of England is predicted to have lost 264 bank branches in just six years.
Customers are increasingly carrying out their transactions online, with 12 million people opening an account with a digital-only bank in 2019, according to comparison site Finder.
Likewise, consumers are ditching the ATM in favour of their mobiles, and the pandemic will only have sped up this change.
In 2019 just 23pc of payments were made with cash, but with many businesses refusing physical payment for hygiene and social distancing purposes during the pandemic, the figure for 2020 could be far lower.
Conversely, UK Finance has recorded a spike in contactless payments - such as tapping payment cards and using mobile payment applications - now attributing for 62pc of cashless payments in November 2020.
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But although this digital, streamlined approach to spending and saving may work for the average consumer there are exceptions to the rule - businesses which need in-branch services and customers who simply prefer face-to-face contact.
The Financial Conduct Authority has implored banks to "consider pausing or delaying new branch closures where possible, particularly where this could have significant impact on vulnerable customers".
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Planned closures already revealed by TSB, Barclays and HSBC alone will result in 302 closures, with Virgin Money and Lloyds Banking Group announcing a further 78.
The trickle down effect in addition to closures since 2015, will see more than 260 banks in the region close, Which? said.
Andrew Mower is the regional development manager for the Federation for Small Businesses, and said: “We’ve lost plenty of big names from the high street in recent times and that in turn reduces footfall for smaller firms – but the loss of a local bank branch is even more damaging.
“Business owners really value the face-to-face relationship they have with their local bank, and there are still very many high street firms who want to make regular cash deposits.”
And where focus has previously been put on older people as standing to lose more should banks close, younger people could also miss out on financial advice.
Dan Mobbs, the chief executive of Map, a youth advice project based in Norfolk, said: "I think it's fair to say that young people have grown up with tech and do feel comfortable using online banking - I don't think many would head into a high street bank to check their balance.
"But as a trend more generally we do see that younger people prefer to get more important advice, topics like jobs, debt and money, from us in a one-to-one and face-to-face manner.
"There is this assumption that the digital generation would prefer to do everything online, but we find that on the more complex topics they'd rather discern between more professional advice in person than mixed messages online."
However a cashless society could have real benefits for consumers, said Scott Mowbray, one of the co-founders of open banking money saving app Snoop.
The Norwich-built app was developed by a team of former Virgin Money bosses who use open banking to give customers greater insight into where they could save money.
Mr Mowbray said: "Some people do make the argument that you spend more when you pay contactless because with a few taps you could spend a lot. But if you've got a handle on your money by using an app like Snoop or similar that wouldn't really be an issue.
"Instead, because Snoop can gain insight into how and where you're spending money it gives the app increased visibility into your spending patterns and so can make more informed decisions about where you can save money.
"In the past year or so we have seen a huge increase in people spending predominantly online in a cashless form.
"The bulk of it has been with sites like Amazon instead of other smaller regular purchases like Starbucks or Costa - but it is very divided between the people who have kept their jobs and are able to continue saving and those who have unfortunately been less lucky. If it's possible for there to be any winners in this pandemic, it's the likes of Amazon."