Banks accused of giving up on high streets as bosses grilled by MPs

Banks have been accused of “giving up on their communities” by closing branches and removing cash machines.

Giving evidence to the Scottish Affairs Committee, representatives of four banks were questioned by MPs about access to financial services amid branch closures.

A third of all bank branches in Scotland have closed since 2015, with bosses arguing more people are managing their money online and over the phone.

Meanwhile, 290 ATMs disappeared from Scotland’s streets in 2018, raising fears about access to cash, according to Which?

The committee launched its banking inquiry following the proposed closure of 62 branches by RBS.

On Tuesday, bosses from RBS, Santander, TSB and Bank of Scotland appeared before MPs at Westminster.

Convener Pete Wishart described the situation as “unacceptable” and said banks have “a corporate responsibility to provide bank services to their customers and their communities”.

He added: “Surely there can’t be areas where there just isn’t a bank available for miles and miles and miles?”

Mr Wishart suggested branch closures contributed to a finding by Which? that trust in banks in Scotland was down to 39% compared to 45% in the whole of the UK.

Deidre Brock MP said: “Banks are basically just giving up on their communities and their local high streets aren’t they?

“This is just really all about the financial savings banks can make as a result of these branch closures.”

Simon Watson, the managing director of personal banking at RBS, claimed: “Closing branches isn’t about saving money for the bank.

“The total savings (from branch closures) were about £9 million but the amount we were investing in the branches was £12 million over the same period.

“Our view is that we are a long way from being a cashless society, we are undoubtedly a less-cash society today but at the Royal Bank we are committed to ensuring the free and consistent and open supply and access to cash right across Scotland.”

Susan Allen, head of retail and business banking at Santander, said the number of transactions at the counters of the bank’s Scotland branches fell 34% in the last three years.

“Branches are important to us and remain important to us but I think actually the way customers are doing banking is changing,” she said.

Ms Allen recognised branch closures “have a huge impact on the community” but said they tried to offer customers alternative ways of banking.

“I sometimes go into our branches and see some elderly customers who have come into town on a rainy day on the bus, with their shopping trolley and their passbook and their ID to come into their branch and do something that they could easily have done from home,” she said.

“And we have a responsibility to them as well to find alternatives that might be easier for them to do.”

On the decision to shut branches, TSB branch distribution director Carol Anderson said: “When we close we would look at all options, so is there a Post Office and is that the right option for that customer, are we leaving free-to-use ATMs?

“And if we can’t meet the needs through our other branches and – if it’s right for the customer – we will talk to them about switching.”

Opening hours at 72 TSB branches have been reduced but Ms Anderson defended the decision.

She said: “We haven’t taken an easy option here because in a lot of respects, for a business, there’s less work involved in closing a branch than there is in reducing hours.”

Ms Anderson was unable to guarantee the reduced hours would protect branches from more closures beyond the end of 2019, instead explaining TSB wanted to examine the impact of the shorter opening times before making a decision.

She said: “We’re not looking at any further closures in Scotland this year.

“We didn’t close any last year and we’ve announced the four we’re closing this year.”

Bank of Scotland network director Ricky Diggins said it still has 201 branches across Scotland, as well as an arrangement for people to do banking at the Post Office.

He said: “More than 90% of our customers in Scotland live within five miles of a branch and we expect to have the largest branch network in Scotland for the foreseeable future.”