WHEN the harsh reality of the coronavirus pandemic was becoming clear two years ago, the UK’s biggest high-street banks were quick to reassure customers that they stood ready to support them through the crisis.

Personal customers were offered mortgage holidays, and businesses facing precipitous downturns in trade could take advantage of emergency loan schemes, underwritten by the UK Government. Such support will have been invaluable to households and firms faced with the huge uncertainty posed by Covid, particularly in the early months of the pandemic when the way ahead was so unclear and vaccinations were a remote prospect.

Two years on, and it appears that the banks no longer appear as keen to support customers. Since the start of the year, the branch-closing activities of the major players look to have gone into overdrive, bringing back into question just how committed the banks are to serving all demographics and communities around the country.

Lloyds Banking Group, owner of Bank of Scotland, was back in branch-slashing mode last week. The bank revealed plans to shut 60 branches around the UK, including 19 Bank of Scotland outlets, citing the increasing preference among customers for digital banking. It was the latest in a series of deep cuts that Lloyds has made to its branch network in recent years, with the bank having shuttered close to 100 last year.

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And of course Lloyds is not alone in taking the hatchet to its physical presence in cities, towns and villages across the UK. NatWest, owner of Royal Bank of Scotland, and HSBC have announced further cuts this year, and we have also seen recent moves by Virgin Money (owner of the former Clydesdale Bank) and Barclays to significantly cut branch numbers on the high street too.

The extent of the cuts of recent years was laid bare in a report published by the consumer watchdog Which? this month. It found that banks and building societies have closed or scheduled the closure of 4,911 branches since January 2015.

NatWest will have closed 1,154 branches by the end of 2022, the report found, while Lloyds has shuttered 769 so far, with that number expected to rise to 830 by the end of 2022.

Given the direction of travel, it would be naive to think that this will be the end of the matter. It seems inevitable that branch closures will be a feature of the banking industry for years to come until one day, perhaps, all that are left are a few, tokenistic, flagship outlets in key city locations. Rarely has the phrase “death by a thousand cuts” felt so apposite.

The justification trotted out ad nauseam by banks for the closure of branches is the continual growth of online and mobile banking. People increasingly prefer the convenience of banking on their phone, and fewer people are coming in, say the banks, which are also quick to highlight the services offered by mobile banks in remote areas, and the fact that simple transactions can be done in post offices.

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Those points may well hold true, but they fail to reflect the more nuanced role played by bank branches in our society. Not everything in life can be reduced to figures on a balance sheet.

Life as we know it was turned upside down by the pandemic. Towns, cities and villages around Scotland have been hollowed out by long periods of lockdown, with even the most renowned streets and thoroughfares left pock-marked by empty units.

The availability of digital services has come into its own during the pandemic, but at a cost. For while the development of technology means we no longer need to leave our homes to bank or buy clothes, the convenience this brings has come at the expense of civic life.

It may suit the banks and perhaps shareholders to cut costs by reducing the number of branches they offer, but is this really in the interest of society as a whole? Indeed, rather than cutting their footprint, should this not be a time for banks to reaffirm their commitment to our towns, villages and city centres? Should we not expect banks to play their part in the difficult task of rebuilding the economy by pledging their continuing presence to high streets that need as many footfall drivers as possible?

After all, it is not as if the big banks have been left financially damaged by the crisis. NatWest, for example, made a whopping operating profit of £4.3 billion in 2021, performing so strongly that it hiked its bonus pool by 44 per cent to £300 million. Bonuses were also back at Lloyds, which made a profit before tax of £6.9bn last year.

The scale of these profits and the bonuses being doled out make the banks’ penny-pinching when it comes to branches seem distasteful, and all the more so when you consider the difficulties imposed by the cuts on customers.

It might not be believable to the banks, but not everyone has ready access to the internet or a smart phone. Many older people find the idea of banking online to be anathema, and prefer the traditional way of doing things, face-to-face. This will especially be the case in communities where customers have built up a rapport and trust with those who work in their local branches for many years.

Then there is the impact on small firms, which continue to rely on cash services in this digital age and are now having to travel increasing distances to carry out those transactions.

“While more and more people are using cashless payment methods – like cards and phones – as long as some people want to use cash then businesses still need facilities to get change and deposit money,” said Andrew McRae, policy chairman of the Federation of Small Businesses in Scotland. “Defunct bank branches often spell long journeys for local businesses, resulting in wasted time and money. When the local bank branch closes, it results in another empty property on the high street and one fewer reason for people to visit their town centre. Regularly when the branch goes the ATM (automated teller machine) goes too, making the withdrawal of cash even more difficult for locals and visitors.”

Unite, the union representing staff at Lloyds, also encapsulated the impact of cuts well last week, declaring that the 124 staff at the 60 branches earmarked for closure are “dedicated to serving the banking needs of the most vulnerable who depend on their skilled services”.

“When a bank branch closes the heart of the local community is ripped out and the results are devastating,” said Caren Evans, national officer at the union. “Unite is clear that simply leaving an ATM in place of a vibrant bank branch is wholly insufficient.

“The banking sector needs to answer some serious questions about its corporate social responsibilities and the Government cannot stand back and allow the relentless closure of banks to continue until no more local banking services remain.”

This latter point merits serious consideration. Banks are generally criticised each time they announce closures, but there is never enough opposition to halt them in their tracks. It is high time for that to change.