What’s The News?Banco Santander’s UK unit is preparing to close 140 branches and lay off around 800 employees. Click To Tweet
What Does This Mean?
As reported by Bloomberg the latest round of pink slips by Santander come after its realization that the progressive use of digital and mobile banking by its customers has diminished the need for physical offices.
Susan Allen, Santander’s head of retail and business banking said:
“The way our customers are choosing to bank with us has changed dramatically in recent years, with more and more customers using online and mobile channels.
As a result, we have to take some very difficult decisions over our less-visited branches and those where we have other branches in the close proximity.”
Santander said that the bank will help customers of closing branches to find “alternatives” that “suit their individual needs”, adding that it is in talks with trade unions to find alternative roles for the 1,270 UK workers that will be affected by the move.
Why Does It Matter?
The Bigger Market Picture: A wave of British high street banks have announced job cuts and closures in recent years. Research by consumer group Which? shows that at least 3,101 branches have closed or are planned to close since 2015, or 60 branches per month.
Gareth Shaw, head of Which? Money said:
“These closures will come as a blow for all those who rely on access to traditional banking services across the UK.”
“Despite the switch to digital ways of banking and paying, millions of consumers still need access to cash. It is vital for a regulator to be given responsibility for ensuring that the people have access to the services they rely on”, Mr. Shaw said.
Ms. Allen said that branches still have a “vital role” in its plans and the bank expected its network to “remain stable for the foreseeable future” – a period stated to cover at least until 2020. Santander will spend £55m on refurbishing 100 remaining branches over the next two years.
Banco Santander is not the lone European bank that is curbing in the costs, closing branches, focusing on downsizing and modernizing branches. With a cutthroat competition amongst the banks, tightening margins and the growing popularity of digital banking, the banks are in a vicious battle for survival of the fittest.
Which? Money reported similar bank closures last year by Lloyds Banking Group and Royal Bank of Scotland Group, resulting in thousands of people losing their jobs.
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