08/05/2018

RBS Branch Closures: How it could affect You

08/05/2018

RBS Branch Closures: How it could affect You

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Back in December, the Royal Bank of Scotland announced that it would be shutting down hundreds of branches throughout the UK – 62 in Scotland alone. Predictably, customers up and down the country, not to mention the staff working in branches to be axed, were outraged at the proposal. Today, RBS’s chief executive, Ross McEwan, faced Westminster’s Scottish Affairs Committee, to address serious questions about what these closures could mean for communities.

RBS in Trouble again

The branch closures, and subsequent redundancies, have wormed their way back into public consciousness just as RBS came under fire for hiring employees in India for as little as £1.19 an hour. These wages amount to, allegedly, only half the average income for South India. Although the bank insists that “Our recruitment process complies with Indian employment law”, hiring such cheap labour, whilst letting go of hundreds of UK employees, is a risky move for its public image. This is especially pertinent since RBS is majority owned by the taxpayer, following a £45 million government bailout during the 2008 financial crisis. According to Unite union, eight in ten jobs are at risk in the branches earmarked for closure – this figure represents hundreds more job losses than RBS itself predicted.

On top of this, RBS has disclosed profits of almost £800 million in the first months of 2018, but has not reconsidered its planned branch closures. For many commentators, this is unacceptable. Rob MacGregor, head of the Unite union, has described RBS’ hiring policy in this instance as “absolutely appalling”.

Concerns from Campaigners

On top of this, Scottish disability and rural campaigners have questioned the legality of the planned branch closures. Both Scottish Rural Action and Disability Equality Scotland have written to the Equality and Human Rights commission, questioning whether the closures will violate the 2010 Equalities Act. Banking is a vital service, and customers who are unable to utilise digital banking, or find it difficult to travel long distances, will likely be hugely affected by the missing branches, especially in more rural areas. Mary Alexander, Unite’s Scottish secretary, suggested that it is “Time to call a halt to the closures to save the communities which stand now to face an economic whirlwind”.

RBS has responded to concerns about customer access by pointing out that its mobile banking services are being expanded to compensate for the missing branches. According to Ross McEwan, “There are 440 communities that we get to every week”. Whilst these mobile bank visits are clearly helpful to many customers, their length is being cut in several areas. For some locations, mobile banking vans will only stop for 15 minutes. Timetables for this service will be reviewed monthly, though, RBS has promised. So-called “smart” ATMs are also planned to carry out some of the services which customers would expect from a physical branch; including transferring money between accounts and clearing cheques. McEwan went on to comment that “This is a big network we’ve created. It just doesn’t happen to be a branch in every village”. Nonetheless, RBS appears to be responding, to a certain extent, to consumer pressures. 10 of the branches it initially intended to close will remain open until the end of the year, pending further review. These branches represent some of the most isolated, situated over nine miles away from another branch.

Reasons for the Closures

RBS has largely justified the planned closures by pointing to the huge rises in online banking adoption. According to RBS, around 5 million customers currently use either their app or online banking services. McEwan has even gone so far as to call the RBS app its “most loved channel”, implying that the branch closures are simply a response to customer preferences. He added that the bank’s new strategy is to move “away from physical distribution when it is just not being used”. Nonetheless, McEwan said, RBS is not taking these changes lightly: “I do recognise that customers are very disappointed that their local branch is closing”, he admitted.

Receiving the Services you need

If you are an RBS customer, you should still be able to access face-to-face banking if you require this service, but it may be patchy. The shorter visits of mobile banking vans mean that customers hoping to use the service will have to time their visits carefully, and hope there isn’t a long queue. To visit a static branch, many customers can expect to travel further. This could prove anything from a minor inconvenience to a serious issue depending on the individual’s situation. Some customers can currently access RBS banking services through their local Post Office, and greater availability may be rolled out given ample demand after branch closures. However, since Post Offices use has been declining since the dawn of the internet, this may not be a viable long-term solution either. Banking over the phone might experience a spike in popularity from customers who cannot or do not want to access online banking services. If demand on this service increases, talking to the bank about issues, including debt problems, may become more time consuming and stressful.

With such significant public criticisms of its practices, RBS may have to provide even more alternatives if they are to maintain their loyal customer base.

 

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