"Many of us are sick of being stuck on the phone, waiting to speak to a 'competent human'"
As banking giants continue to close high street branches, a new opportunity is opening up for mortgage brokers to offer personalised services.
HSBC is only the latest of the big banks to announce large-scale branch closures.
Data collected by the government has shown that since the mid-1990s, the number of bank and building society branches across the UK has been on the decline.
The total number of bank and building society branches in the UK fell by 40% between 2012 and 2022. This trend has largely been attributed to a decline in footfall, with many customers looking to serve their banking needs online.
This may offer an opportunity for smaller lenders and intermediaries to serve the substantial proportion of customers who prefer face-to-face interaction for major transactions.
The value of one-on-one service
“We have seen a huge change to our high streets and none more apparent than the disappearance of bank and building society branches,” said Dominik Lipnicki (pictured), director of Your Mortgage Decisions.
“The banks will rightly point out that, for many consumers, the way that they bank has changed and branch footfall has greatly reduced in recent years,” Lipnicki said. “Electronic banking is the norm for most and that automation is only likely to increase.”
But Lipnicki points out that automation is not the answer for clients wishing to hold a discussion on the delivery of what could be considered more complicated products – such as mortgages, equity release or protection.
“In my experience, many borrowers welcome that personal one-on-one service with the more complicated topics.”
He believes that branch closures will also reduce brand loyalty among customers, through the closure of the personal branch relationship. In turn, he expects the need for intermediaries offering a wide range of lenders, as well as tailor-made, personal advice. will be welcomed by many.
“Many of us are sick of being stuck on the phone, endlessly going through a menu in the hope that we can get to speak to a competent human,” he said. “The intermediary market can really benefit here but only if the customer journey is of the highest standard.”
Digital shift
Jeff Knight, director of Grey Matter Marketing, notes that the closures of high street branches has been going on for a long time, as we move to a more digital banking environment.
“However, there will be pockets of society who cannot bank online, so this could mean an opportunity for smaller regional building societies, perhaps,” he said.
Knight also suggests there may be more collaborations with ‘outposts’ in other retail outlets and cafes, similar to moves by with the Post Office.
With regards to the mortgage market, Knight believes the closure of high street branches will be greeted with smiles amongst mortgage brokers.
Knight also said there could be an argument that the cost savings of closing branches, might best be reinvested into more efficient systems to enhance the mortgage process for brokers and their clients.
“This would be welcomed, but the cynic in me believes this will not happen,” he said. “With profits for shareholders critical in a time when other costs are rising, the balance sheets will simply absorb the saving rather than re-investing.”
What opportunities do you believe could be created by mainstream banks closing branches? Let us know in the comments below.
