2014 : A YEAR OF CHANGE  
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Report for 16 months to 31 December 2014
 


CCBS reported on its first 15 years in September 2013 and that review of our considerable achievements remains available in the REPORTS section of our website.

2014 however signalled the start of a period of transformational change for the retail banking industry in the UK, as we forecast in our January 2014 Press Statement. It was also the start of a period of change for CCBS as the focus of activity shifts from community involvement driving press coverage to an increase in lobbying of government, parliamentary and regulatory bodies.

Failure by the banking industry

Branch closures escalated with 479 recorded closures in 2014, more than double the previous year.

Even more importantly the hard won voluntary pledges by 3 of the traditional Big 4 not to close where ‘last bank in community’ came to an end during the year in which CCBS identified 124 such closures – a trend which is expected to increase in 2015.

CCBS had always seen ‘last bank’ pledges as temporary, freezing a pattern of historical location decisions but not addressing population movement and economic, social and technology changes. They should have been a window for the industry to research and pilot alternatives to closure including standalone shared use branches and to make long overdue improvements to the operation and awareness of Inter Bank Agency Agreements which would help to sustain existing branches.

The pledges are gone, branch closures are escalating and still no acceptable and sustainable alternatives are in place for market sectors such as small businesses, especially retail, and ‘third sector’ organisations plus the more vulnerable for whom the post office is not acceptable.

Changes at community level

Although the numbers of branch closures are markedly up, local organised protest - with some notable exceptions - has diminished, a situation which CCBS attributes to:

  • Low community expectation of any bank today reversing a closure decision once made.
  • Growing acceptance of technology, especially smartphones but also on-line, telephone and ATMs, which means fewer bank customers are directly impacted by branch closure.

Accordingly CCBS’s involvement with local communities’ ‘save our bank’ campaigns is minimal but work on especially deserving ‘test cases’ provides the case studies to respond to media enquiries.

Political/Regulatory

Following the failure of the Independent Commission on Banking and the Parliamentary Commission on Banking Standards to properly address the issue, despite input from CCBS and a Treasury Committee recommendation to the ICB, 2014 has provided new opportunities.

CCBS evidence to HM Treasury seeks inclusion of Inter Bank Agency Agreements as a ‘designated system’ for regulation by the new Payment Systems Regulator. Although a Treasury decision is not expected until April, further evidence has been submitted directly to the new regulator.

In September 2014 CCBS held a meeting at the House of Commons for supporting organisations and interested MPs hosted by Roger Williams MP (LD) who had instigated two Westminster Hall debates on rural bank closures.

CCBS supported the call for a full market investigation by the new Competition & Markets Authority into the supply of retail banking services to personal current account customers and to small businesses. We have submitted initial evidence and offered more: final report is due April/May 2016.

Towards the end of the year, in response to lobbying in the face of a growing number of branch closures disadvantaging certain market sectors, Treasury Minister Andrea Leadsom MP (C) initiated meetings with the banks seeking proposals and the Secretary of State BIS Vince Cable MP (LD) has commenced a more urgent call for proposals. Although the latter is founded on BIS’s responsibility for Post Office Limited, the agenda is wider and includes “sharing of premises and services” which should include standalone shared use branches, on which the LINK scheme has done preparatory work to which CCBS has contributed, and Inter Bank Agency Agreements. The Secretary of State has acknowledged that the post office network needs work before it would have the capacity to cope with the additional footfall of business customers of the big banks and CCBS member organisations share this concern to an even greater degree: a position which has been put by CCBS to Post Office Limited, BIS and RBS/NatWest, the first group to agree terms with the Post Office.

Research

CCBS continues to be the sole source of industry wide readily available, timely, data on branch closures and ‘last bank in community’. CCBS’s annual Branch Network Reduction Report for 2014 was published on our website in September. Through existing relationships CCBS has contributed to the programme for a fact finding visit to the UK in February by executives from Australia’s network of community banks which use a business model potentially useful to UK initiatives.

Media

We continue to provide up to date factual data and case study introductions to the media on request including arranging, through our relationship with the operators, a visit by the Mail on Sunday to a standalone shared branch near Washington DC reported on in December. Although branch closure numbers have greatly increased and local and national media coverage is obtained, including CCBS representatives on TV and radio, the space and positioning of the stories in print and broadcast media, with a few exceptions, continues to diminish.

Contacts

During the period CCBS has participated and spoken at meetings of banking professionals and consumers, maintained a dialogue with supporting organisations and met regularly with nominated executives in six banking groups, the BBA, the Payments Council, and government departments.

The Year Ahead

The outcome of the political moves initiated in October will determine the pattern of branch closures in 2015 and beyond, and also the future shape of CCBS activity.

Support

18 national organisations support and fund the Campaign, representing the interests of the elderly, disabled people, small businesses, consumers, bank employees, rural and urban communities, the environment and the poverty lobby. The Campaign’s policy is governed by an active and involved group drawn from these sectors.

Website

The Campaign website www.communitybanking.org.uk continues to be popular with journalists, researchers and government agencies as well as communities facing closure threats.

12 January 2015