2020
9
UK The Role of the Branch in Retail Banking Market Report 2020
2020-12-08T03:11:09+00:00
OX990104
2195
128419
[{"name":"Banking and Payments","url":"https:\/\/store.mintel.com\/industries\/finance\/financial-services\/banking-payments"}]
Report
en_GB
“COVID-19 has driven a rapid acceleration in the adoption of digital banking and cashless payment methods, further reducing the need for bank branches. However, despite their steadily declining use, consumers…

UK The Role of the Branch in Retail Banking Market Report 2020

£ 2,195 (Excl.Tax)

Report Summary

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the The Role of the Branch in Retail Banking – UK market including the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Covered in this report

48% of people who use bank branches are using them less as a result of the pandemic, and 40% expect to continue using them less even after the pandemic has passed. COVID-19 has accelerated a long-term decline in branch banking as it has led many previously reluctant consumers to adopt digital channels and contactless payments to reduce the risk of spreading the virus, hastening the demise of the transactional bank branch. As a result, the trend towards branch closures is likely to continue apace over the next few years.

Expert analysis from a specialist in the field

Written by Thomas Slide, a leading analyst in the Financial Services sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

COVID-19 has driven a rapid acceleration in the adoption of digital banking and cashless payment methods, further reducing the need for bank branches. However, despite their steadily declining use, consumers continue to regard bank branches as important for the local community and as an important safety net in case of emergencies or for making major financial decisions.
Thomas Slide
Senior Financial Services Analyst

Table of Contents

  1. Overview

      • Key issues covered in this Report
        • COVID-19: market context
          • Products covered in this Report
          • Executive Summary

              • Impact of COVID-19 on branch banking
                • Figure 1: Short, medium and long-term impact of COVID-19 on branch banking, October 2020
              • The market
                • Bank branch closures accelerate
                  • Figure 2: Number of branches in the UK, 2016-20
                • Building societies account for a growing proportion of branches
                  • Consumer behaviours are negating the need for branches
                    • Companies and brands
                      • Lloyds has the largest branch network
                        • Figure 3: Estimated branch numbers of individual banking brands, 2019/20
                      • TSB has the highest branch to customer ratio
                        • Everyone is restructuring branch networks
                          • Physical space is important, so re-invent it, don’t lose it
                            • The consumer
                              • Young people are more likely to have visited a bank branch
                                • Figure 4: Reasons for visiting a branch, August 2020
                              • Most people travel less than 15 minutes to a branch
                                • Figure 5: Time spent travelling to a bank branch, August 2020
                              • Two thirds visited a bank on the high street
                                • Figure 6: Location of branches visited in the last 6 months, August 2020
                              • COVID-19 has accelerated the shift away from branches
                                • Figure 7: Impact of COVID-19 on branch visits, August 2020
                              • Blending humans and technology for the perfect visit
                                • Figure 8: Important features of a bank branch, August 2020
                              • A physical presence helps build trust
                                • Figure 9: Attitudes towards branch banking, August 2020
                            • Issues and Insights

                              • COVID-19 has accelerated the decline of branch banking
                                • The branch of the future will add value without being a necessity
                                  • Physical banking needs to be flexible, adaptable and localised
                                  • The Market – Key Takeaways

                                    • Branch banking is in rapid decline…
                                      • …but it’s not about to disappear
                                        • Banks are closing branches faster than building societies
                                          • Consumer behaviours are negating the need for branches
                                          • Market Size

                                            • COVID-19 has changed consumers’ relationship with branches
                                              • Figure 10: Short, medium and long-term impact of COVID-19 on branch banking, October 2020
                                            • Decline in branches accelerates
                                              • Branches are not about to disappear
                                                • Figure 11: Number of branches in the UK, 2016-20
                                              • What happened after the last recession
                                                • Figure 12: Number of branches, 2010-14
                                            • Market Segmentation

                                              • Bank closures outstrip building societies
                                                • Figure 13: Market segmentation, 2016-20
                                              • London has the largest share of branches
                                                • Figure 14: Number of branches, by region, 2020
                                              • East Midlands has the fewest branches per head
                                                  • Figure 15: Population per branch, by region, 2016-19
                                              • Market Drivers

                                                • Steady growth in managing finances online
                                                  • Figure 16: Managing finances online, by device, October 2017-September 2020
                                                • Consumer preference for branch services declines
                                                  • Figure 17: Preference for using in-branch services for retail banking activities, 2018 and 2020
                                                • COVID-19 prompts half of people to avoid cash
                                                  • Figure 18: Avoidance of cash due to COVID-19, April-November 2020
                                                • Decline in cash machine availability
                                                  • Figure 19: ATM network, 1998-2019
                                                • Shift to online shopping reducing high street footfall
                                                  • Figure 20: Forecasted share of retail sales, by channel, 2015-24
                                                • Adapting branches to changing behaviours
                                                • Regulatory and Legislative Changes

                                                  • Access to cash
                                                    • Guidance for closures
                                                      • Protecting the vulnerable
                                                      • Companies and Brands – Key Takeaways

                                                        • Lloyds has the largest branch network
                                                          • TSB has the highest branch to customer ratio
                                                            • Everyone is restructuring branch networks
                                                              • Physical space is important, so re-invent it, don’t lose it
                                                              • Market Share

                                                                • Lloyds Banking Group accounts for a fifth of all branches
                                                                  • Further closures are planned
                                                                    • Figure 21: Number of branches and market share, 2019/20
                                                                  • TSB closures bring it closer into line with others
                                                                    • Figure 22: Branch to customer ratio, 2019/20
                                                                  • Retailer banks offer ready-made physical space
                                                                    • Using the Post Office as a backup can’t be relied upon
                                                                    • Competitive Strategies

                                                                      • Lloyds Banking Group
                                                                        • Barclays
                                                                          • NatWest Group
                                                                            • Nationwide
                                                                              • Figure 23: Nationwide ‘4C’ branch layout, 2020
                                                                            • HSBC
                                                                              • Figure 24: HSBC Birmingham branch
                                                                            • Santander
                                                                              • TSB Bank
                                                                              • Innovation and Launch Activity

                                                                                • A space to learn, work and play
                                                                                    • Figure 25: Santander Work Café
                                                                                  • Taking banking outside of the branch
                                                                                    • Protecting the vulnerable
                                                                                      • UK’s first cashless bank branch
                                                                                      • The Consumer – Key Takeaways

                                                                                        • Young people are more likely to have visited a bank branch
                                                                                          • COVID-19 has accelerated the shift away from branches
                                                                                            • Blend humans and technology for the perfect visit
                                                                                              • A physical presence helps build trust
                                                                                                • Do not underestimate the importance of branches to local communities
                                                                                                • Reasons for Visiting a Branch

                                                                                                  • Half have visited a branch to make a cash transaction
                                                                                                    • Figure 26: Reasons for visiting a branch, August 2020
                                                                                                  • Young people are more likely to have visited a branch
                                                                                                    • Figure 27: Reasons for visiting a branch, under-45s vs over-45s, August 2020
                                                                                                • Time Spent Travelling to a Bank Branch

                                                                                                  • Majority travel less than 15 minutes to a branch
                                                                                                    • Figure 28: Time spent travelling to a bank branch, August 2020
                                                                                                  • 25-44 year olds either drop in or travel further
                                                                                                    • Figure 29: Time spent travelling to a bank branch, by age, August 2020
                                                                                                • Branch Location

                                                                                                  • Two thirds visited a bank on the high street
                                                                                                    • Figure 30: Location of branches visited in the last 6 months, August 2020
                                                                                                  • Older people are more reliant on high street branches
                                                                                                    • Figure 31: Location of branches visited, by age, August 2020
                                                                                                • Impact of COVID-19 on Branch Banking

                                                                                                  • Half of people are visiting bank branches less because of COVID-19
                                                                                                    • Figure 32: Impact of COVID-19 on branch visits, August 2020
                                                                                                  • Almost half expect to go back to normal after the pandemic
                                                                                                    • Figure 33: Post-COVID-19 expectations, August 2020
                                                                                                • Important Features of a Branch

                                                                                                  • Convenience and speed are key
                                                                                                    • Figure 34: Important features of a bank branch, August 2020
                                                                                                  • Enhance the experience by blending experts with technology
                                                                                                    • Figure 35: TURF Analysis – The role of the branch in retail banking, September 2020
                                                                                                  • Integrate digital and physical to make the branch experience seamless
                                                                                                    • Figure 36: Features that would encourage bank visits, August 2020
                                                                                                • Attitudes towards Branch Banking

                                                                                                  • Bank branches are a way to build trust
                                                                                                    • Figure 37: Attitudes towards branch banking, August 2020
                                                                                                  • Branches are seen to play a key role in communities
                                                                                                    • Figure 38: Attitudes towards branch banking, August 2020
                                                                                                  • Consumers are not entirely convinced by digital banking services
                                                                                                    • Figure 39: Attitudes towards branch banking, August 2020
                                                                                                • Future of the Branch – Customer Segmentation

                                                                                                      • Figure 40: Cluster analysis of consumer attitudes towards branch banking, August 2020
                                                                                                    • Key demographics
                                                                                                      • Figure 41: Age profile of cluster groups, August 2020
                                                                                                    • Where they bank
                                                                                                      • Figure 42: Where they bank, by cluster analysis, August 2020
                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                      • Market size data
                                                                                                        • Abbreviations
                                                                                                          • Consumer research methodology
                                                                                                            • TURF analysis methodology

                                                                                                            Why Mintel?

                                                                                                            Gain access to high quality market research with every purchase of Mintel’s consumer reports. Here's what else you can expect when buying from us:

                                                                                                            Mintel’s Clients Portal

                                                                                                            After your purchase is completed, you’ll receive an invitation to join Mintel’s Clients Portal which provides instant access to supplementary insights from Mintel’s industry experts.

                                                                                                            Multiple Report Formats

                                                                                                            Mintel’s reports are available in PDF and PPT formats, and arrive in your inbox alongside an excel datasheet, so you can share Mintel’s market intelligence with ease.

                                                                                                            Interactive Databook

                                                                                                            Mintel’s bespoke consumer data is presented as an interactive website, so you can deep dive into your chosen topic, explore demographics and download specific statistics.

                                                                                                            Custom Presentations

                                                                                                            Using Mintel’s custom presentation tool, you can easily incorporate selected research data and analysis into a tailor-made presentation to win over clients and stakeholders.

                                                                                                            Browse our sample PDF report below:

                                                                                                            Click to show report
                                                                                                            2024 Sample Consumer Cover

                                                                                                            Please Note: All of the figures, graphs, and tables in this sample report have been redacted.

                                                                                                            Trusted by companies. Big and small.

                                                                                                            Want to speak to us directly?

                                                                                                            Contact us with your enquiry and our expert global team can help.

                                                                                                            Get in touch