UK lenders agree to set up 'banking hubs' after mass closures

The shift to online banking has led to mass closings of UK bank branches

By AFP

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A drone view of London's Canary Wharf financial district in London. Between 1986 and 2023 8,944 branches closed their doors. — Reuters

Published: Thu 12 Sep 2024, 10:02 PM

UK banks have agreed to set up 350 "banking hubs" to address the impact of branch closures over recent years, the finance ministry said Thursday.

The shift to online banking has led to mass closings of UK bank branches with the elderly, people with disabilities and small businesses hardest hit, especially in rural areas.

City Minister Tulip Siddiq secured the industry's agreement for the hubs rollout over the next five years at a meeting with representatives of all the major high-street banks, the ministry said.

"Banking hubs are a lifeline for local communities that have lost their final bank branch," Siddiq said.

"I'm confident that the banks will deliver on the commitment made today, as well as take a more active approach to meeting the needs of local communities," she added.

Between 1986 and 2023 8,944 branches closed their doors, taking the total from 14,689 to 5,745, according to official figures.

The closures -- by banks including the big four of Barclays, HSBC, Lloyds and NatWest -- have alarmed consumer groups, who argue that they hit those who predominantly still use cash, particularly the elderly.

Under the agreement, 230 hubs will be in place by the end of 2025 with a further 120 rolled out by mid-2029 at the latest.

The hubs, a manifesto commitment by new Labour Prime Minister Keir Starmer ahead of the July election that brought him to power, will be small facilities serving all banks that provide services such as paying in cheques, depositing cash or face-to-face conversations with a "community banker".

A commitment to provide printers in the hubs so customers can print off statements, however, has not yet been agreed by the banks.

The ministry said Siddiq was given a commitment at the meeting that the industry delivery body, Cash Access UK, would look at the "feasibility of having printers in its hubs".