Millennials are much more likely to use an app on the go rather than visit a bricks-and-mortar branch to pay a bill or manage their money. The move towards a cashless society has even seen Big Issue vendors taking contactless payments in parts of the country.
So it’s hardly surprising that one third of branches in Scotland have closed since 2010. RBS’s recent decision to shut 62 branches nationwide might have sparked an outcry, since many rural ones were quite literally the last bank in town. But given their declining footfall, it appears to make sense from a business point of view.
Like video rental, shopping, and even dating, banking just seems yet one more activity that is moving increasingly online. Shouldn’t we just accept that and embrace the 21st century economy?
But that’s not the view of thousands of account holders affected. RBS’s planned closures have raised serious questions about the future of personal banking in general.
The Scottish Parliament’s Economy, Jobs and Fair Work Committee recently launched an enquiry to examine the impact of closures on local businesses, consumers, and the economy, and explore steps to address any issues. They’re inviting people to respond by 13 April. One of the most worrying aspects is that older people are most affected by closures. As younger generations happily tap, chat, and email away, it’s easy to forget that not everyone uses the internet or feels confident banking online.
Although three quarters of Scotland’s older population is already connected, a substantial proportion are not – and this number rises with age. According to the latest research from Stirling University’s HAGIS project (Health Ageing in Scotland), 56 per cent of people aged 80 and above never use the internet.
Even if they are online, research by our sister charity, Age UK, found that older people prefer a visit to their local branch. More than four in ten of those aged 55 to 64 don’t use internet banking at all. This increases to 70 per cent among those aged 65 and over.
Of course, they are not the only ones affected. In many rural areas, local businesses operate very much a cash economy. Small business owners from shops to bed-and-breakfasts rely on banks to pay in cash and manage their finances.
Many of us find that there are still services that we need to visit a branch for, such as opening an account, verifying our identity or applying for a mortgage.
One caller told us that after forgetting her account password, a telephone advisor told her she would have to “pop in” to her nearest branch. The only problem was that she lived in rural Perthshire and the closest one involved a journey of almost two hours on two different buses. For someone with mobility problems, this would have been even more of an ordeal.
So what can we do? While it’s easy to point a finger at banks, we can’t force them to keep open branches that aren’t economically viable. We need to work together to find creative solutions that ensure no one is financially excluded.
This week, I’m joining Andy Haldane, the chief economist of the Bank of England, to host an event in Airdrie where older people can express their views. It’s a chance for them to share their experiences of the banking system and discuss issues ranging from branch closures to mortgage rates and the state of the economy. I’m looking forward to hearing a diverse range of views and suggestions on how to make banking more age-friendly.
We’re urging banks to consider new and innovative ways to reach their customers. RBS already offers a mobile banking service in many rural areas, but not all their vans provide access for those with disabilities. Adapting these vehicles would be a simple step to improve service for older and less mobile customers.
One idea worth considering is shared branches between a number of different banks. This might seem a radical suggestion, but we believe it fits with the reality of customer behaviour today. Many people already have accounts with different banks. This model would provide a convenient, one-stop branch with banks dividing the costs between them.
As well as counter service, staff could assist customers with online or phone banking as needed. This could reassure those who lack the confidence to bank remotely and address their security concerns.
Other options include banks sharing their premises with post offices or other businesses.
The idea of the local bank, with a friendly manager who knows every customer by name, might sound more like a 1940s movie than 21st century Scottish life. But there is still a clear need for bank branches despite our increasingly technological lives. We welcome a national debate on the best way for banks to cater for all their customers.
Brian Sloan, chief executive, Age Scotland.