Number of branches at selected large banks in the UK 2017-2023

With the rise of online banking and the speed and convenience that it brings, the presence of physical bank branches has become less important in recent years. The most prominent change in bank branches during the period from 2017 to 2023 can be seen with the UK's big four (Barclays, Lloyds, HSBC, and NatWest). During this period, Barclays closed almost 1,000 branches across the country, but the other three dominant banks also saw their branches decrease sharply.

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.