HSBC to close 62 branches as free ATMs face threat

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And while the bank state that their "branch restructuring programme" will end with these new closures, they come at a time when free ATMs are being threatened by attempts from banks to cut their running costs.

And together with the recent news that retail banking isn't doing enough to support those with particular needs, these announcements suggest how the changing face of banking may end up having a disproportionate effect on the most vulnerable.

Yet given how the big five UK banks have all struggled to regain their pre-recession profits, it's unlikely that any of them will stop in their re-focusing on mobile and online banking, which are markedly cheaper than their bricks-and-mortar counterpart.

Closures

And it's precisely because they're cheaper that HSBC will continue closing branches in 2017, despite having shut some 321 already between January 2015 and December 2016.

Of course, other high-street names participated in the branch-closing game over this period of time, with the Co-operative Bank closing 53% of their network (117 branches) and RBS and Lloyds closing 191 and 180 branches respectively.

Yet HSBC "restructuring programme" is especially aggressive, although their justification of this is to say that the vast majority of their customers prefer alternative methods of banking.

Defending the imminent closures, Francesca McDonagh, HSBC's head of retail banking, said "Fewer people are using branches. More than 90% of our interactions with customers are now through our digital channels - an increase from 80% last year".

McDonagh speaks of an annual 10% increase here, yet it shouldn't be forgotten that over two years, the number of HSBC branches decreased by 27%.

In other words, it's arguable that former customers of closed branches were more or less forced to move their banking online. Hence, the 10% increase was largely the result of forced migration, and not some general trend in banking to which HSBC are merely responding.

Indeed, it's just as arguable that the bank are helping to engineer this move away from the branch, by giving people little choice but to bank via digital channels.

ATMs

And at the moment, it seems as though another factor may soon also require such a move. This is the dispute that's emerging over free ATMs and the Link network that powers it.

The banks are arguing that the interlink fee they have to pay when their customers use a non-bank ATM (e.g. an ATM in a supermarket, mall, or train station) is too high. They're demanding a 20% reduction, and they'll be meeting this week to discuss how exactly it could be achieved.

However, the fear is that, if they get their reduction, Link will have to begin charging customers to use non-bank ATMs.

This is worrying insofar as it's already been established that ATMs contribute to financial exclusion, particularly for those people on low incomes or in rural areas who don't have easy access to a bank machine.

If more non-branch ATMs stop being free, then such people will have even less access to their cash, making it harder for them to get by without having to make costly journeys.

And it's precisely the same argument that applies to HSBC's freshly announced closures. By shrinking the already limited supply of branches, these will make it harder for certain people to access their money, especially those who count among the UK's digitally excluded.

The Protocol and the Post Office

That said, there have been several recent developments which, in theory at least, will soften the blow of the bank's latest round of closures.

The first of these were November's proposals from the British Bankers' Association regarding the Access to Banking Protocol.

Coming into effect at some undeclared point this year, they'll require imminently closing branches to advise customers on alternative banking methods. They'll also require bank staff to provide vulnerable customers - such as the elderly - with more targeted help adjusting to life after branch-banking.

It currently hasn't been specified what form such help will take, however, so it's hard to say whether the updated Protocol will fully compensate for the loss of physical branches.

Nonetheless, a more promising piece of news was announced yesterday, namely the industry-wide agreement between the Post Office and the UK's banks to make day-to-day banking available at post offices nationwide.

This new agreement - which brings existing arrangements with individual banks under a single scheme - will enable "99 per cent of UK personal bank customers" to perform transactions at their local post office.

With the ability to make payments and withdraw cash, this agreement will most probably do a good job of preserving basic face-to-face banking. However, whether it will show the kind of sensitivity to people with special needs that has been increasingly shown by trained branch staff, is another question entirely.

But at the very least, it shows there are options available to customers of the 62 branches that HSBC believe are no longer economic.

Have you been affected by branch closures? Let us know in the comments section below if you have. We'd be particularly interested in hearing how you've coped with any changes..