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Santander announces latest branch closures as digital channels take over

Bank to close 140 more UK branches as in-branch transactions fall and digital banking accelerates

Santander is closing 140 branches in the UK with 1,270 employees set to be redeployed or laid off, as app-based banking continues its ascent.

The closures will leave Santander with 614 branches in the UK.

The bank said it will refurbish 100 existing branches over the next two years at a cost of £55m to create what it called “a branch network of the future”.

About two-thirds of the 1,270 staff affected are expected to be found new roles at the bank.

Santander said customers are increasingly using mobile and online channels and its network has to be changed to reflect this. It said the number of in-branch transactions have fallen by 23% over the past three years, while transactions via digital channels have almost doubled.

Susan Allen, head of retail and business banking at Santander, said: “The way our customers are choosing to bank with us has changed dramatically in recent years, with more and more customers using online and mobile channels. As a result, we have had to take some very difficult decisions over our less-visited branches, and those where we have other branches in close proximity.”

The growth in mobile banking apps has accelerated the move to digital channels. Online banking has been around for years, but when banking was made available via smartphones, with easy-to-use functionality, the move to digital banking rocketed.

Mobile banking apps are now the most-used channel in the UK. This is being driven by the millennial generation – people aged between 18 and  34.

survey of more than 13,000 consumers carried out by financial services review firm Smart Money People revealed that mobile apps have become the UK’s most popular banking channel at the expense of the online channel.

In the 2018 survey, 39% of respondents said they preferred apps to bank with. This compared with just over 30% in the same survey in 2017. Branch banking was preferred by 11% of respondents in 2018, compared with 12.2% in 2017.

Read more about app-based banking

The number of people banking from their mobile phones is increasing as more services are made available through the channel.

Thousands of people a week are downloading a new banking app on their smartphones to sign up for the services of app-based challenger Starling Bank.

UAE bank’s new account is based on a smartphone app that is designed to learn and adopt to customer preferences.

Read more on Financial applications

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