Weaponising financial institution department closures – Chris Skinner’s weblog – Cyber Tech

The UK has an election in July. The possible winner is the left-of-centre Labour Occasion, after 14 years of the righter wing Conservative Occasion. The brand new chief shall be Sir Kier Starmer, a man described as a “political robotic”. However, his get together has created a burning platform to win votes. No, it’s not “cease the boats” (do away with migrants); it’s “cease the financial institution department closures”, a sure-fire vote winner!

GBN: The Labour Occasion has pledged to create 350 banking hubs to offset the latest development of department closures and “breathe life into Britain’s excessive streets”.

That is Cash: The hubs are shared centres the place prospects of most main banks can go to withdraw and deposit money and get banking help and recommendation. They had been created in response to widespread department closures, with 6,000 financial institution branches having shut their doorways since 2015.

Cash Week: It will achieve this by giving the Monetary Conduct Authority (FCA) new powers, and by reforming the factors for the place hubs might be created.

Banking hubs make sense for small companies and customers who need over-the-counter service. For instance John Howells, Hyperlink chief government, mentioned: “banking hubs are proving a very fashionable approach of offering entry to money and fundamental banking for customers and companies who want to make use of a excessive road department”.

Yep.

Apparently, I’ve predicted the demise of branch-based banking, money and card funds and extra for many years. We’re lastly there, after which we revive it with hub-based banking and make {that a} political place.

Funnily sufficient, I’ve all the time mentioned that as a “companies” enterprise (monetary companies), you’ll all the time want human contact. Whether or not that’s by cellphone or in a constructing, the human contact is a key differentiation in finance. If I’m frightened about my steadiness, I would like someplace to go to say: SHOW ME THE MONEY!!!!!

It’s simply that I don’t want 1000’s of locations to shout that message. Only one. Close by. Inside driving distance or a bus trip.

That’s the rationale why I’ve predicted branches would shut for years. Again within the Eighties, Britain had over 20,000 financial institution branches. In the present day, we’ve simply over 5,000. That appears about proper. The truth is, I reckon there’s nonetheless room for extra closures.

What are financial institution branches wanted for? Serving outdated age pensioners and small companies that deal in money and cash? The pensioners will die and the small enterprise that makes use of money will exit of enterprise. Finish of story.

However, core level: a financial institution should still want bodily shops, however they need to ask themselves why?

This was answered for me by Che! Banca in Italy, who informed me that branches are their advertising and marketing funding. The place they’ve branches, they get thrice extra belongings invested than the place they don’t. That is smart.

Meantime, throughout an election marketing campaign, the main get together dictating that they may promise to open extra banking hubs to cope with banks making department closures is an attention-grabbing angle. Is it a vote winner? You inform me.