July 23 - 24, 2020
The Westin Copley Place, Boston, MA
The UK Is Banking on the Post Office to Help Support Its Dwindling Network of Bank Branches
brought to you by WBR Insights
The branch network is dwindling all over the globe, and financial brands are being forced to innovate to make sure they can keep providing local banking services to their customers.
The UK has lost two-thirds of its bank branches over the last 30 years, going from 20,583 in 1988 to just 7,586 today. While the UK is obviously a much smaller land mass than the US, this reduction in physical locations has still left some areas of the country without a local bank branch. In fact, 19 percent of UK residents now live two miles from their nearest branch with eight percent living more than three miles away.
(Image source: which.co.uk)
However, the UK's banking institutions have a plan and are looking to the Post Office to help them continue delivering branch services to clients.
For the uninitiated, the Post Office is the UK's government-owned retailer of postal services and the public face of the Royal Mail. The brand has over 11,500 branches located throughout the UK and sells postal and parcel products and services as well as a range of other services such as passport photos, household bill paying, and more.
The Post Office has offered limited banking services for some time now, allowing customers to perform simple transactions such as paying in and withdrawing money from their accounts, but the relationship between banks and the Post Office is now becoming even deeper.
Many people are of the opinion that, because of the proliferation of online banking, the need for physical branches will soon be relegated to the history books. However, this is not quite the case.
"While overall branch footfall is in decline, most people still use physical branches," reported consumer watchdog, Which?. "86% told us they'd visited a bank branch at least once in the past year, in an online survey of 2,049 UK adults in September 2018. When we asked about the impact of branch closures, 83% said branches should stay open for those who are unable or unwilling to use alternatives, 77% said we need branches in case there are technical problems with digital alternatives. TSB locked up to 1.9 million online and mobile customers out of their accounts following a botched IT upgrade earlier this year, while Barclays, HSBC, and RBS have all experienced outages in recent months."
To combat what it calls "bank branch deserts," digital financial brand, Starling Bank has announced a new partnership with the Post Office.
Starling Bank is a mobile-only banking brand which was recently voted Britain's Best Bank 2018. The bank's current account scored a dizzying 4.93/5 out of nearly 3,000 reviews, and its business account product scored 4.94 out of 225 reviews. With the brand having only released its public app in May 2017 and already achieving such high accolades, it felt it was time to step into the physical world and help plug the gaps in the UK banking network.
Starling Bank has built its reputation on providing seamless mobile banking experiences. But it now has a physical infrastructure in place to empower its customers to make deposits and withdraw money from their accounts, all thanks to its Post Office partnership.
"The partnership provides consumers with physical account access alongside their mobile banking," said Starling Bank in a press release. "It brings the total number of banks now part of the Post Office's Banking Framework to 28, helping to provide vital access to banking services, especially in those 1,500 communities across the UK which are without a bank branch. It means that the customers of almost all UK banks - from traditional High Street branches to online banks and now Starling, a mobile bank - can withdraw cash, deposit cash, and check their balance, all through their local Post Office branch."
The decimation of the bank branch network has hit many customers hard, especially those who are elderly, infirm and/or have difficulty travelling the two miles or more to their nearest branch.
However, with innovative partnerships such as those between Starling Bank and the Post Office, banks can continue to offer counter services, while saving money from not having a full branch location.
"There are now over 1,500 communities in the UK with no bank branch," said Founder and Chief Executive Officer of Starling Bank, Anne Boden. "So, by combining Starling's cutting-edge digital banking technology with the unique reach of Post Office branches, we can bring simple and affordable banking back to these Bank Branch Deserts. I set up Starling Bank with the mission of improving financial health and making banking about the customer again. This is exactly the kind of development that will help us achieve this, returning banking services to often forgotten communities."
Using innovative partnerships to offset the cost of fully featured branches is set to be a hot topic at Future Branches 2019, taking place in November at the Hilton Austin, TX.
Download the agenda today for more information and insights.