Virgin Money will be closing 31 branches as coronavirus continues to make life harder for physical banking. . Fergus Murphy, Group Customer Experience Director at Virgin Money, commented: “As our customers change the way they want to bank with us and conduct fewer transactions in-store, we must continue to evolve the role of our stores into places where we showcase our products and bring our digital services to life.”
Why are the branches closing?
Virgin Money announced these plans as it “adapts to changing customer demand”. The bank explained the number of customers using bank branches for day-to-day transactions has been “on a downward trajectory across the UK banking industry for a number of years, and this has been further accelerated by the pandemic”.
The choice in which specific branches were chosen for closure was based on a number of factors. This included location, usage, proximity to alternative stores and lease arrangements.
Virgin Money assured “each store was assessed on an individual basis, with careful consideration of the impact on the local area, as well as the needs of vulnerable customers and the accessibility of alternative services such as free-to-use ATMs and Post Offices”.
On the latter, Virgin Money placed emphasis on how access to Post Offices will help limit the damage customers would face.
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The bank said: “Customers can use Post Offices for day‐to-day banking, including cash deposits and withdrawals, cheque deposits and balance enquiries, as well as coin exchange.”
Of the 30 customer branches closing, 28 are located less than a third of a mile away from the nearest Post Office. Of the other two stores, one is 0.7 miles away from a Post Office and the other is 2.7 miles from the nearest alternative Virgin Money store.
What’s next for customers and staff?
The branches will close in early 2022 and Virgin Money said it’s its “intention to find alternative roles for colleagues wherever possible, either within other stores locally or elsewhere in the Group”. However, the bank acknowledged even with these efforts some colleagues will be at risk of redundancy.
Virgin Money continued: “Written notification will be sent to customers and posters will be displayed in each affected store at least 12 weeks before they close, providing details on the alternative ways customers can continue to manage their accounts, including nearest alternative stores, ATMs and Post Office counters.
“Virgin Money will work with customers to support a smooth transition, particularly where vulnerable customers are concerned. A range of support services will be available prior to store closures, including digital workshops to help customers become more comfortable with digital banking.”
Following these changes, Virgin Money will have a network of 131 stores across the UK.
An industry wide problem
Virgin Money is not the only banking company to announce closures. In late July, Tesco Bank confirmed it will be closing all of its current accounts by November 30, 2021.
Gerry Mallon, chief executive of Tesco Bank, commented: “The way customers shop and manage their money is constantly evolving. We are committed to developing products and services which align with the needs of Tesco shoppers.
“With so few of our current account customers using it as their primary account we want to support them to find a suitable alternative dependent on their circumstances.
“We will pay particular attention to supporting any vulnerable customers and those in need of financial assistance.”
In the same month, M&S Bank confirmed it would also be closing its in-store bank branches, with all of its current accounts being shut down on August 31.
Analysis of this from money.co.uk showed there was a “growing trend of high street banks” favouring servicing their customers online or by telephone, as opposed to in-person.
How many bank branches are left?
In April 2021, the Government released a briefing paper examining the number of bank and building society branches in the UK. The results showed in March 2020, there were 9,560 bank or building society branches in the UK. Of these 7,675 were bank branches and 1,880 were building society branches.
However, since the mid-1990s, the number of bank branches in the UK has been falling steadily, whilst the number of building society branches has been broadly steady. Between 2012 and 2020, the total number of bank and building society branches in the UK fell by 28 percent.
The number of ATMs, or cash machines, available to the public is also declining. According to LINK, which operates the vast majority of cash machines, the total number of ATMs in the UK peaked at 70,588 in 2015. The number has falled in each year since then, to the February 2020 total of 53,813.
In response to these issues, the Government, along with other public bodies such as the Financial Conduct Authority, have vowed to protect access to cash, especially for older savers.