Number of branches at selected large banks in the UK 2017-2023
Does the closure of branches affect employment?
The closure of bank branches is not only bad news for customers in rural and specific regional areas. Arguably, the biggest tragedy of this phenomenon is the loss of employment. Between 2009 and 2022, employment in European credit institutions fell by approximately 610,000. UK banks have been no exception. Lloyds saw its employee base decrease by roughly 50 percent between 2012 and 2022, and so did NatWest Group.
Key reasons behind closures
The decline in physical bank branches has often been linked to the rise of online and mobile banking. In the UK, for instance, the majority of bank account holders prefer mobile and online banking over branch banking. While branch banking has certainly lost popularity in recent years, another reason behind branch closures is that it has become a way of decreasing expenditure as profit margins become tighter. This is in line with the need for European banks to secure enough capital to prevent another financial crisis.