Age UK wants banks to accelerate the creation of physical banking hubs as research shows 40% of over-65s don’t bank online.
As high street banks continue to shutter branches at a rapid rate, the charity for the old has warned of “banking deserts” that could see over four million Brits at risk of financial exclusion.
Research commissioned by the charity and carried out by Ipsos found that four in 10 over-65s – over four million people – do not manage their money online, and that 75% of the-over 65s – over seven million people – want to carry out at least one banking task in person. It also found that over three million people in the age group feel uncomfortable with online banking.
Banks’ announcements of branch closures are inevitably accompanied by statements that customers are moving to digital channels and that footfall in branches is dropping rapidly.
Banks have been closing branches and redirecting investments into digital channels for years, and the Covid-19 pandemic – which forced customers online – accelerated the take-up of digital services and reduction in branch use.
Recent rounds of bank branch closures have seen Lloyds Banking Group, NatWest and Barclays shutter branches.
ATM network provider LINK is coordinating banking hubs, where consumers from different banks can deposit and withdraw cash. There are plans for 38 banking hubs, and the same number of services for people to make deposits.
Age UK is calling for the protection of physical banking services and an accelerated roll-out of these shared banking hubs in areas “where bank branches are fast withering away”.
Caroline Abrahams, charity director at Age UK, said: “We need to face up to the fact that huge numbers of older people, the ‘oldest old’ especially, are not banking online. In addition, our research also shows that even older people who do bank online often want the ability to talk to a bank employee in the flesh about some kind of transaction.”
Caroline Abrahams, Age UK
She said the charity’s research findings demonstrate the huge and continuing demand for face-to-face banking services among the old, and demanded that banks respond, because “otherwise, they are effectively disenfranchising millions who are willing and able to manage their finances – just not online”.
Abrahams added that there was hope that shared banking hubs could fill the void left by bank branch closures, but called for an acceleration in their establishment. “Our concern is that there can be too long a delay between bank branches shutting down in an area and a new banking hub becoming operational,” she said.
She acknowledged that it takes time to establish a banking hub and get it going, but suggested communities should be given time for a hub to be established before branches close.
TSB and Barclays are introducing separate projects to provide alternatives for customers affected by branch closures.
Barclays launched a project to create “banking pods” where banking services can be accessed. The bank describes the banking pods as “purpose-built, semi-permanent structures in sites such as shopping centres and retail parks”.
The bank said at least 10 will be set up in the UK by summer 2023. To reach customers in remote locations, it also plans for six more electric vehicle banking vans to be added to its existing fleet of 10.
In December 2022, TSB said it was piloting its own banking pods, which will offer banking services in shopping centres and provide an alternative source of banking services as more bank branches close.
It is running three pilots of its pods in North London, Wigan and Luton. They use technology, known as BankHive, from ATM provider NoteMachine to connect customers with TSB to carry out their banking.
Customers will be able to access cash and TSB will soon add functionality so they can deposit money. They will also be able to get support from advisers on activities such as making payments, accessing products and services, or setting up digital banking.
In May last year, the government said it would legislate for the Financial Conduct Authority (FCA) to ensure banks allow consumers to access cash and make deposits within a reasonable distance from their homes. “To support the FCA, the government will in due course set out its expectations for a reasonable distance for people to travel when depositing and withdrawing cash,” said a statement from the Treasury at the time.