Why bank branches still matter

Many have argued for years that branches are dead. Many in the fintech world believe that people don’t need branches. Some think that the pandemic proved that customers can bank just fine without them and that many now prefer it.

Wrong.

A bit like cash, the pandemic forced a change of behaviour. Less cash was being used and branches were ghost towns. Then the pandemic restrictions lifted and more cash is being used, and the same with branches. It does not mean that the future is one where cash and branches disappear; it means a future where cash and branches are far less the front-line for finance.

Back in the last century, my prediction was that most banks would get rid of 80% of their branches, and refocus on mainstream conurbations such as shopping malls and the highest footfall city centres.

At the time, most large banks had thousands of branches and yet retailers, like Marks & Spencer, had 250 stores. Using that analysis it was clear that as we moved away from transactional banking in branches to digital banking online, the branch was less relevant.

The number of bank branches in the UK fell from over 20,000 in the late 1980s to roughly 6,870 by 2024. This number escalated specifically in the last decade. Between January 2015 and the end of 2024, more than 6,600 branches closed in the UK, representing a reduction of two-thirds of the network.

Breaking down these numbers by each large British bank:

• Barclays:Recorded over 1,200 closures between 2015 and early 2024, leading the pack with 180 closures in 2023 and an additional 90 in 2024.

• NatWest Group (NatWest/RBS/Ulster): Closed roughly 1,360-1,400 branches between 2015 and late 2024, with another 138 in 2023 and 105 planned for 2025.
• Lloyds Banking Group (Lloyds/Halifax/BoS): Closed over 1,100 branches between 2015 and 2024, with 83 Lloyds and 76 Halifax closures in 2024, and further closures scheduled into 2025.
• HSBC: Closed over 700 branches between 2015 and 2024, including 114 in 2023.
• Santander: Reduced its network by nearly 500 branches over the same period, with a notable 95 closures in 2025.

• Branch Reliance: Despite the decline, over 13 million Britons still relied on branch services in 2025.

Note: Data represents aggregated figures from Which? and Statista, covering the "Big Five" UK banks (Barclays, HSBC, Lloyds, NatWest, Santander) and Nationwide..

The thing is that the branch is less relevant, but not irrelevant. In fact, it’s the same debate that retailers have. Can you exist in an app, or do you need a showroom?

In my experience of retailing, it’s all well and good except with clothing and shoes and getting gas for my car. Some things need to be physical, and my argument would be the same with banking. Transactional banking needs no physical connection – it can all be done in an app or online – but decisional banking – by which I mean savings, investments, credit, lending and more – needs access to humans. Not for advice, but for ideas. Equally, decisional banking is an area that, for many, is nervous. Add on to this that more of those nerves are in the psychology of money. If you cannot see who is doing your banking, can you trust them? Give me a place I can knock on the door and demand show me the money! In other words, it is my regularly repeated mantra: the branch is there for trust and marketing, not for service and advice.

Taking this further, a million Brits have no bank accounts; two million have no online access; over four million have zero home access to the internet; a quarter of UK adults – over 13 million people – don’t use mobile banking apps … the list goes on.

So yes, I agree with many out there who say that bank branches are less needed, but I disagree with the premise that branches are dead. Branches are still important. Just in a very different way, as you will see tomorrow.