Co-operative Bank will close 18 branches and cut around 350 jobs, blaming the closures on low interest rates, economic uncertainty and the shift to digital banking.
The job cuts are being made at the branches being shut as well as in the bank’s middle management.
Co-operative Bank chief executive Andrew Bester said prolonged economic uncertainty means that the bank had to make the cuts, adding that the branch closures were also decided as a result of increased digital banking among the bank’s customer base.
“We are responding to the continuing shift of more customers choosing to bank online, with lower levels of transactions in branches. This is a trend which has been increasing for some time across the banking sector and more broadly,” said Bester in a statement.
The 18 branches were chosen following analysis of the number of customers using them during the whole of 2019, before the Covid-19 pandemic.
“We are writing to affected customers to provide information about the alternative options available to them, including Post Office counter services, telephone, online and mobile banking,” said a statement from the bank. The closures are expected to be completed by December.
The shuttering of branches by banks has been going on for years as they attempt to cut costs and move people into digital channels. In 2015, the bank closed 57 branches to cut costs, leaving it with 165.
The Covid-19 lockdown, which saw bank branches closed and restrictions put on their activity when they reopened, has driven many consumers to digital banking services rather than branches.
While contactless payments, mobile money management and mobile payments has increased in volume, banks have also offered face-to-face services via video link to customers who want human interaction when making financial decisions.
The use of cash has also plummeted. According to a survey of 2,000 people from Nationwide Building Society, the average respondent has gone more than six weeks without using cash. Digital payments are unsurprisingly increasing, with many people using them for the first time. Lockdown has forced 27% of respondents to use mobile payments and 25% to use online or mobile banking for first time.