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The Clydesdale and Yorkshire banking group is investing hundreds of millions of pounds in the online banking and technology platforms at its Yorkshire Bank business.
The group plans to invest £350m to overhaul the operation, with online banking and technology platforms set to receive major funding. It will close about 50 branches under a plan to cut £100m in costs by the end of September 2019.
David Duffy, CEO at the banking group, said that despite the reduction in branches, the investment would improve customer experiences.
“Delivering our strategy will provide an improved branch experience, supported by a strong digital offering, reflecting the new face of banking and putting customers at the heart of what we do,” he said.
The bank has already reduced its workforce by about 500 and closed 26 branches over the past 18 months.
High-street retail banks are transforming their businesses in the face of increasing demands from customers and competition from new digital banks as well as suppliers of banking services via technology, known as fintech.
Banks in the UK are reducing the number of branches and staff they have as more consumers bank online and through mobile apps. For example, earlier this year the Royal Bank of Scotland announced plans to close 32 branches and cut 600 jobs, blaming changing customer banking habits. Some 200 jobs will go in London, and 400 in the Midlands and northern England.
Read more about the impact of technology on bank branches
- The Royal Bank of Scotland is “taken aback” by ever-increasing take-up of digital banking and announces further branch closures across UK.
- Bank branches are being used less and less, but that doesn’t mean customers are getting a less personal service.
- Norwegian bank DNB is closing branches and cutting jobs as more customers move to digital channels.
A recent EY study of more than 10,000 digitally active consumers found that about 3,000 had used fintech. Among fintech users, 25.2% of 25 to 34-year-olds used two or more fintech services, and EY expects this figure to reach close to 50% in the foreseeable future.
Banks are being warned to get their act together. For example, a recent study by the Strathclyde Business School said the traditional financial services sector in Scotland could lose 14,000 jobs and £635m in wages if organisations did not speed up adoption of the latest financial services technology.