The number of bank branches, credit unions, and building societies in the UK has declined significantly, dropping by over a third in the past five years. According to the Office of National Statistics (ONS), branch numbers decreased from 10,410 in 2019 to 6,870 in 2024, marking a 34% reduction. Major institutions, including Lloyds, NatWest, Halifax, and Bank of Scotland, have announced plans for an additional 113 closures by the end of November.
This contraction in physical banking locations coincides with a growing trend of consumers opting for digital banking solutions. For instance, NatWest revealed that approximately 80% of current account holders now prefer online services, with most new accounts being opened via digital channels.
The UK leads Europe in branch closures, surpassed only by Spain (37%) and the Netherlands (48%), as reported by management consultancy Kearney. Sameer Pethe, a partner at Kearney, emphasized in the Financial Times that this trend reflects a strategic shift among high street banks towards digital services, aligning with customer preferences.
While online banking becomes increasingly popular, the closure of physical branches has raised concerns regarding access to banking services. In response, the Financial Conduct Authority (FCA) implemented measures last year to ensure that banks and building societies assess local access to cash services, including branches and ATMs.
To address potential service gaps, banks have committed to establishing 350 banking hubs, operated by the Post Office, where customers can conduct cash transactions.