Let’s be honest: retail banking is broken

Over the past decade, the industry has aggressively optimised for cost and digital efficiency and, in doing so, it has quietly dismantled the human infrastructure that made banking work for millions of people.

Start with the facts.

In the UK alone, more than 6,000 bank branches have closed since 2015, according to consumer groups and parliamentary reports. That’s roughly half the entire network gone in just ten years. Entire towns now have no bank at all. LINK, the UK’s ATM network, reports that we’ve lost over 15,000 free-to-use ATMs since 2018, and cash usage even though, while declining, cash still accounts for around 1 in 5 payments, particularly among vulnerable and older customers.

And yet, here’s the paradox: while banks have been shutting branches on the assumption that “everyone wants digital,” the data tells a more nuanced story.

A YouGov UK survey (2024–25) shows that 31% of adults still visited a branch in the past year. Even more striking, 21% of Gen Z – the so-called digital natives – still walked into a branch, more than any other generation.

So this isn’t just nostalgia. It’s need.

What we’ve done is move from a simple, relationship-driven model – one account, one branch, one manager – to a fragmented, multi-channel mess. Most of us now have multiple bank accounts, multiple apps, multiple passwords, and multiple security layers. The result isn’t empowerment. It’s cognitive overload.

And when something goes wrong? You’re stuck in a call queue for an hour; the chatbot can’t understand your issue; the app menu doesn’t cover your problem; and the branch you used to visit no longer exists.

This is the dirty secret of digital banking: we’ve optimised the happy path, but abandoned the exception path. The moments that actually matter.

Now, to be clear, I’m not anti-digital. Far from it.

I’ve spent years arguing for apps, APIs and analytics as the foundation of modern finance. I love the fact I can open accounts in minutes, move money instantly, and manage everything from my phone.

But digital-only is not the answer.

Because digital introduces new risks.

Cybercrime is rising. For example, UK Finance reports over £1.2 billion lost to fraud annually, much of it enabled by digital channels. Phishing, social engineering and account takeovers are now everyday threats. And when those things happen, people don’t want another app notification.

They want a human being.

What we’ve created is a system that is highly efficient when things go right, and completely ineffective when things go wrong.

That’s not progress. That’s imbalance. The real question is not physical versus digital. It’s how to design physical and digital together, because the future of banking is not branchless and it’s not purely app-based. It’s hybrid. A world where digital handles the routine, the real-time, the automated and physical handles the complex, the emotional, the trust-based.

That’s the gap and that’s what banxlocal is trying to solve. Not by going backwards to old-school banking, but by rethinking distribution for a new era combining physical presence with modern infrastructure, using shared services, smarter economics, and yes, AI to make branches viable again because, in the end, banking is not just about transactions. It’s about trust … and trust is human.