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Post Office branches can now offer banking services to 99% of retail bank users and 75% of businesses in the UK, following an agreement between the banks and the Post Office going live.
Banks have been under pressure to find alternatives to their own branches, which are being closed down as more and more customers choose to bank online and via mobile apps.
For example, HSBC has announced plans to close 62 UK branches this year and invest in its digital channels. Royal Bank of Scotland (RBS) and Lloyds have made similar announcements recently. These banks want to redirect spending and customers to digital channels.
"HSBC’s decision to close the branches reflects a change in the way customers are banking, its continued investment in digital banking and its objective to achieve a sustainable branch network for the long ter,"said HSBC.
The bank said it is investing more than $1bn and that over the past five years, the number of customers using HSBC branches has fallen by almost 40%.
But closures are leaving some people without access to a local bank branch when they need it. Customers of some UK banks were already able to use Post Office branches for banking services, but now all UK bank customers are included.
The Post Office has 11,600 branches and carried out 110 million banking transactions last year.
“We are working with banks to ensure that our network of bricks and mortar locations gives consistent and the widest possible availability of face-to-face banking services across the UK, with many customers already benefitting,” said Nick Kennett, CEO at Post Office Financial Services.
Read more about the impact of technology on bank branches
- Atom Bank is the latest digital bank to propose Post Office branches as places where customers can make transactions.
- Bank branches are being used less and less, but that doesn’t mean customers are getting a less personal service.
- RBS is set to close branches and cut jobs due to the rapid take-up of digital banking services.
“Millions of consumers and small businesses across the UK will now benefit from unrivalled access to banking services, including on Sundays, thanks to the Post Office,” said business minister Margot James. “This is the biggest expansion in branch banking services in a generation, and I am delighted the network is able to offer these services to so many customers.”
British Bankers’ Association CEO Anthony Browne said 90% of people now live within 20 minutes’ walk from a bank or a Post Office where they are able to do their banking face-to-face with another person. He called this essential to ensure people are not left behind by the digital revolution in the financial services sector.
“Banking is changing hugely, with people now able to speak to their banks at any time of the day or night on the phone or check their balance on an app. But this isn’t for everyone, as some people still want that personal contact, which is why this arrangement with the Post Office is such good news,” he said.
“It ensures customers can continue to access face-to-face banking and that nobody gets left behind by the technological revolution sweeping the industry.”