General Election 2024: Almost 400 Towns Have Lost Their Local Bank Over the Past Two Years

More than 6,000 banks and building societies have closed since January 2015, with new data indicating a steep rural/urban divide between 
 

• 12% of the public find the letters and email received from their bank ‘too confusing’ to understand
• 41% of the public believe that it is the responsibility of banks to educate people on money management and understanding personal finances

 
Zahra Hassan, banking expert and co-founder of Eligible, discusses the need for the next government to urgently the address the growth of “bank-less” communities across the UK

Research from Link, which tracks the closures of banks, has revealed that almost 400 towns across the UK have been told that their local bank is closing within the past two years. Since the beginning of 2015, over 6,000 branches have closed, with scores more already scheduled to close this year.

The data from Link also illustrates a distinctive rural/urban divide – with the majority of towns and villages with only one bank largely residing outside of metropolitan areas, creating so-called “banking deserts”.

This is particularly significant given the widespread financial concerns gripping the country, with 45% of Brits saying that their finances are keeping them awake at night, according to Aviva. In light of this, Zahra Hassan, banking expert and co-founder of Eligible, the UK’s first platform using AI to deliver personalised financial expertise, discusses how the next government ought to prioritise those left behind by the closure of high-street banks.

Illustrative of the effects of these closures, Age UK have stated that the increase in bank closures and slow roll out of alternative support could disenfranchise up to four million elderly people. Further to this, the timing of this avalanche of closures comes as Brits are feeling the effects of the cost of living with, according to BMG consulting, 58% saying they are just staying afloat due to the squeeze on household budgets.

Hassan therefore asserts that without access to direct in-person help, digital communication needs to be airtight. According to research from Eligible, 12% of the public are confused by the language used by their lender, whilst 41% of Brits believe that is its the responsibility of banks to educate people on money management.

Whist certain banks are starting to adjust their standards, with a number of major lenders funding the roll-out of banking rubs and Santander converting struggling branches into work cafes. Hassan argues that the real potential remains in the correct implementation of AI led technology.

This is due to its ability to analyse masses of customers’ financial and behavioural data and spot any potential financial difficulties early on. This detection can then be utilised by lenders to provide customers with bespoke financial advice, informing them about the measures they need to take to best support their situation in a digestible and timely format.
 
Hassan comments:
 
“The emergence of banking deserts is a huge concern for consumers living outside of big metropolitan areas, particularly because we’re also seeing a surge in closures for suburban bank branches. With an already pervading lack of trust, taking away an institution’s physical presence is liable to make consumers more anxious. So, you have to replace it with something better. Accessibility has always been an issue in banking, so here’s an opportunity to completely reform consumer interaction and facilitate a new, more convenient way of relaying important information.

“What AI can do today is interact with customers and measure the level of understanding of their existing product before providing bespoke financial expertise. Based on this, we can start to form views on the likelihood that they could struggle to meet their payments.

“AI can be used to detect how well people understand their financial product and use this data to spot vulnerable customers in order to better educate and support them.”