HSBC closes 82 branches as in-person banking continues to decline

HSBC has announced the closure of 82 UK-based branches between April and September this year.

The programme began almost a year after the bank announced it was getting rid of 35,000 jobs between 2020 and 2022.

But the bank says these branch closures won’t contribute to the planned job cuts. lInstead, these workers will move to other nearby branches. The company will have 511 branches across the country following the closure programme.

The programme arises out of HSBC’s wish to shed $100 billion in assets by the end of next year. The bank justifies the closures as a result of customers preferring digital banking.

The further reduction in UK bank branches puts more pressure on already stretched Post Offices. HSBC says each closing branch – apart from one – is within a one-mile radius of a Post Office, pointing to the new direction of face-to-face banking traffic in these areas.

Those 511 HSBC branches still open will be susceptible to further changes

Bank branch usage falls by a third

Jackie Uhi, HSBC UK’s head of network, notes in a statement that the closures were not a direct product of the COVID-19-induced uptick in adoption of digital alternatives.

Instead, Uhi cites figures harking back five years. They show the bank’s branch usage has fallen by a third. She also highlights only 10% of customer contact happens through HSBC’s branches now.

The bank has around eight million UK customers, meaning around 800,000 customers still use HSBC’s branches.

The other 90% – or 7.2 million – interact over the phone, via the internet or through a smartphone – be that on the app, or on social media.

“It [the pandemic] hasn’t pushed us in a different direction but reinforces the things that we were focusing on before and has crystallised our thinking,” the exec explains.

“This is a strategic direction that we need to take to have a branch network fit for the future.”

Those 511 HSBC branches still open will be susceptible to further changes, such as shifting some to cash access-only, or moving them to a “pop-up” branch model.

Bank branch alternatives

Phil Jones, the senior vice president for banking at Paris-based omnichannel firm,Teleperformance, thinks HSBC’s branch closures raise an important question.“How can financial institutions leverage technology without losing the human element?”.

Jones says banks like HSBC “need to master a balance between tech-smart support and the human touch”.

HSBC is no different from other UK high street banks which are also cutting down on in-person banking operations in the wake of popularised digital banks like Monzo and Starling.

The number of bank branches closing across the UK in the last five years has mirrored the decline in face-to-face banking at HSBC. According to a report by the consumer group Which?, more than a third have closed in the last five years, between January 2015 and August 2019, totalling to 3,303.

But according to the 2019 Access to Cash Review, some 9-12 million people simply won’t be ready for a branchless, cashless society when it inevitably arrives.

Which is why OneBanks, a Glasgow-founded fintech, is one such start-up trying to plug the gap these closures are leaving behind.

The start-up began piloting the kiosks in rural Scotland last year. Few other – if any – fintechs have cropped up in this space since.

Read next: Meet OneBanks: the fintech picking up after banks’ branch closures