RBS set to close 1 in 4 branches

The Royal Bank of Scotland has announced that it’s shutting 259 branches and cutting 680 jobs in a move that some observers have said signals the end of branch network banking in Britain.

The closures will affect 62 RBS and 197 NatWest branches, leaving 744 still open across the RBS Group’s national network. The announcement follows similar ones by Lloyds and Yorkshire Building Society, which also said last week that they would be closing 49 and 13 branches respectively.

RBS says that the move is driven by the significant shift from customers using branches to going online to manage their money. The bank claims that branch visits have dropped 40% since 2014, and that over the same time mobile transactions have increased by 73%.

Some people have commented that this is bad news for those customers, like older people and small businesses, who rely on branch banking. But RBS has pointed out that 5 million of their customers now use mobile banking, and one in five solely engage with the bank digitally.

This shift is part of a larger strategy to modernise and restructure the bank, which includes shutting the ‘bad bank’ which was set up to handle its toxic assets, and passing the Bank of England’s stress tests, which it failed in 2016.

These improvements to RBS’s business all bode well for the government’s renewed plans to sell down its 71% stake in the bank. But, in order to ensure RBS is as attractive to investors and customers as possible, a robust and positive communications plan will need to developed alongside impressive bottom line metrics.

RBS has said it is committed to helping both customers and staff with the continuing transition to a more digital-first approach to banking. So, it will be interesting to see what new products, services, and engagement initiatives this commitment translates into over the next few years.