8 in 10 people feel bank closures will be ‘detrimental’ to communities
• 4 in 10 will switch bank if their local branch is to close
• 64% of 18–24-year-olds prefer to bank online, more than double the amount of over 55s
More than 8 in 10 people (82%) say bank closures around the country will have a detrimental effect on customers and communities, while 4 in 10 intend to switch their banking provider if their local branch closes. A new survey by Peopl Insurance , the nationwide provider of home and life insurance, has found an overwhelming majority of respondents are critical of branch closures, agreeing that the reduction in personal, face-to-face service, and the resulting job losses within communities are likely negative outcomes.
The survey comes in the wake of recent notices to Ulster Bank and KBC customers alerting them of the timeframe in which they have to switch their accounts to a new bank before each provider withdraws from the retail banking sector in Ireland.
Speaking of the findings, Paul Walsh, CEO of Peopl.ie commented,
“Both banks, particularly KBC, have been receiving some heat from the Central Bank of late because of their behaviour towards customers in terms of closing bank accounts before a certain deadline. While the banks have been forced to soften their approach, the fact remains that hundreds of thousands of customers will be inconvenienced, at the very least, as a result of these closures.
In addition to the bank closures themselves, over the last couple of years we have witnessed a widespread movement towards branch closures by banking institutions that are still very much active in the country. Last year, Bank of Ireland closed more than one third of its branches nationwide with the closure of 88 branches.
Our survey indicates that, whether or not people have yet to be directly impacted by these developments, there is resounding concern amongst the general public over the knock-on consequences of these closures on communities around the country, with 82% agreeing that the withdrawal of local branches holds little reward for consumers or communities. The substantial differences in views between younger and older people masks a more important gap. It highlights the major differences between transactional ‘day-to-day’ banking and relationship banking, which we all need for sound advice on mortgages, savings, pensions, and for times when things go wrong.”
Additional highlights from the Peopl.ie Bank Closure Survey include:
– Double the number of men (24%) than women (12%) believe bank closures are a good thing – seeing them as a positive sign of advancements in technology.
– More than 4 in 10 18–24-year-olds see closures as a good development – much higher than the national average of less than 1 in 10 adults.
– Of those who believe the closures are not good, significantly more people age 25+ see the loss of personal service as being the primary negative consequence.
The Peopl.ie survey also asked respondents what they would do if their local branch was to close?
– 4 in 10 will switch bank if their local branch is to close – more women (45%) than men (38%) are likely to do this.
– 64% of people aged between 18-24 prefer to bank online, while just 29% of those over 55 feel the same way.
– Double the number of men (10%) to women (5%) already bank solely online
Mr. Walsh commented,
“The generational gap in terms of consumer behaviour is telling when it comes to public response to potential bank closures. The youngest respondents are clearly already more accustomed to online banking, with over two thirds of 18–24-year-olds being happy to go ‘all online’ in terms of their service provision, as opposed to just 29% of those over 55. However, those aged between 25-34 years align themselves more closely with those in older age cohorts in terms of their preferences, with 4 in 10 saying that they would consider changing to a provider with a face-to-face option.”
Mr. Walsh concluded,
“Dwindling public services in rural areas have caused concern for many rural communities who have been at the coalface of cuts, most recently with the post office closures, for years. The tipping point between online and branch-based business has been reached, and closures of banks and other institutions are unfortunately becoming an increasing reality. Obviously, this has a disproportionate effect on older customers, who, with mobility or transport issues cannot easily access a branch in the next large town, or who may not be digitally literate enough to navigate online banking with confidence. However, the survey highlights that it’s not just rural communities that are affected – urban areas too feel the pinch in terms of both job losses and banking services.
The loss of a local branch, one in which we are known, can get good advice and access more important financial products such as mortgages, savings and investments, leaves very few options. In many communities we see Credit Unions looking to step into this role and expand their services to address the ‘relationship gap’
While from a business perspective, over-the-counter banking may be becoming a thing of the past – our survey shows that there is large appetite out there and demand to retain these services within communities, for both their social and economic benefits.”