If banks already seem detached at times from the interests of the people they serve, they are likely to seem even more so after the latest branch closures by Clydesdale.
The bank is to close 16 branches, mainly in small towns around Scotland and in Aberdeen, continuing a trend among Scottish banks (RBS recently announced the closure of its second Paisley branch within a year following a 15% drop in the number of its customers). Though Clydesdale's chief executive David Thorburn argues the move is necessary in order to keep pace with changing customer needs, the closure of these premises will be a substantial loss to the communities they serve.
There is no escaping the fact the way the majority of people do their banking has changed. Government research reveals half of Britons used the internet to do their banking last year, up from just under a third in 2007. Once customers discover the convenience of phone, internet and mobile banking, they are likely to reduce their visits to the local branch, which in turn means staff time in some branches will be underused.
There are still many customers who visit their branches regularly, however. What becomes of them if their branch closes, especially if they live in a rural area and the nearest alternative outlet is many miles away? Older customers are the most likely to fall into this category. While 76% of 25 to 34-year-olds do internet banking, only 23% of those aged 65 and over do, and 43% of those aged 55 to 64. Some will, of course, adapt to internet banking, but some will not. Once their local branch has closed, these customers will be expected to travel further to do their banking, which may not be practicable or affordable, especially if public transport is patchy.
This decision also adversely affects business customers. Citizens Advice Scotland quotes research showing two-thirds of people running small rural businesses visit their bank every week. That relationship of personal trust between bank manager and small business owner is a foundation stone of Scotland's rural economy. Clydesdale's closures, spread across rural areas and small towns, is likely to have a disproportionate effect on them, leaving them with the unappealing choice of having to travel further to another branch, or try and conduct their business affairs online and through the post.
In some places, such as Auchterarder, the closure of the Clydesdale also presents another danger, namely that only one bank - in that case the Bank of Scotland - will remain. After years in which Scotland's small businesses have struggled to obtain affordable loans, the last thing they need is anything that could make their banks less competitive. Having no rivals in an immediate locale is unlikely to make banks try harder for trade.
It is good news the Clydesdale has ruled out compulsory redundancies and is talking instead of staff redeployment, but this is not just a question of jobs, it is about the role banks play in supporting communities. Many will feel today that the Clydesdale has let them down.
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