Banks, a different approach by country

Last week I noticed my local HSBC branch had posted a notice to explain is was closing and relocating all customers to another branch 12 miles away.

They are not the last branch in town, however it is, no doubt, disappointing nevertheless for the local businesses and customers.

Whilst I understand the economics behind of the decision, and have previously written about the changes underway the banking industry, what really stuck me was a difference between the UK and Canadian market.

The UK has been on a journey of bank branch consolidation and reduction for sometime.  There has been a steady decline in physical locations and services available within the remaining branches, as costs are reduced and activities move online.

On explaining the changes in the UK to bank executives in the Canada I received the response that the view was physical branches drove market share and customer base.  I even saw this in my area of the city.  We had all 5 big banks locally, 2 of which actually had two separate branches in easy walking distance.  It was a clearly very different approach.

I also came across further interesting data from the Campaign for Community Banking Services in the UK.  Their study lists bank branches per 1mm inhabitants,

  • UK  150
  • France 410
  • Germany 450
  • Spain 720
  • Italy 520

A quick calculation puts Canada at 228.

Now I will be the first to admit, I find online banking extremely convinient, easy and sometimes easier.  My only frustration is when things become complex a visit to a branch really is needed.  They have the user access and being able to talk face to face really does help solve a request quickly.

So, with more changes on the way in the UK, is this an efficiency too far?  Or is this the march of progress in an extremely competitive market in a digital world?  Is this a predictor of further change in other markets?

Disappointed as I am personally to be losing a local branch, it will be interesting to watch the industry changes as they evolve.

Overall the impact on town, UK and Canada… time will tell.

Image Credit: wikipedia

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