Cost of living pressures have increased the number of customers relying on bank branches to help manage their squeezed budgets, research shows.
While the Covid-19 pandemic accelerated the adoption of online-only banking, particularly during lockdowns, research from the accountancy firm KPMG showed a quarter of UK consumers were more likely to visit bank branches now that households were grappling with surging energy, food and housing costs.
The survey found that more than a third of consumers were more likely to visit a branch since they were using cash as a budgeting tool and intended to withdraw or deposit cash in-branch.
However, the most popular reason for turning to brick-and-mortar branches was to meet bank managers; 38% of the consumers asked were hoping to discuss their finances, the research showed.
“While the move to digital banking is desirable for most, our research uncovers an important truth – bricks and mortar bank branches are vital for an increasing number of people who are struggling to manage their personal finances,” said Karim Haji, KPMG UK’s head of financial services.
KPMG said there had already been a rise in use of branches. In December 25% of individuals surveyed had visited their bank in-person, up from 22% during the same period a year earlier. About 18% had visited in the past week alone, compared with 13% in 2021.
“The cost of living crisis has seen individuals and households who previously didn’t need to budget now having to,” Haji said. “During this challenging economic period banks must recognise the importance of having access to a bank branch.”
Nearly half of the UK’s bank branches have shut their doors since 2015 as lenders have cut costs and shifted customers to online banking.
Last month HSBC said it was shutting a further 114 branches in the UK – more than a quarter of its network – after claiming use of its outlets by regular customers had plummeted by two-thirds in five years.
HSBC has accelerated calls for other options such as banking hubs, where a group of high-street banks provide staff on rotation to serve customers at shared locations operated by postmasters. About 25 hubs have been announced to date, but only two have opened so far, in Rochford, Essex, and in Cambuslang, near Glasgow.
“The banking sector is already exploring innovative new ways to enable customers to access services in person, such as through multi-bank hubs. Today’s research demonstrates just how important it is that work happens at a pace,” Haji said.