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Whilst we must be grateful for every attempt by the banking
industry to alleviate the problems of customers and communities
affected by bank branch closures, the BBA pilot scheme which commenced
on 2 January 2002 in just 10 locations is a disappointment to
us because:
- only one format is being tested
- insufficient attention seems to have been given to profiling the selection of branches for inclusion
- to date there has been no sharing of data with consumer bodies to reassure us on the validity of this small sample as a test-bed on which to base decisions on the future of local banking provision
Unsuccessful
If the scheme is judged, by the industry, to be unsuccessful at
the end of 2002 at best valuable time will have been lost
to pilot in other formats and in other types of community; at
worst there will be no further experimentation with shared/community
banking. Branch closure programmes were halted in June 2000 following
the huge media and public outcry at Barclays' effectively doing
all their 2000/2001 planned closures on 1 day, but the economic
drivers of branch closure have not gone away and informed opinion
is that closures will re-commence at a future date.
Successful
If the scheme is judged, by the industry, to be a success what then?
The question we must ask, on behalf of disadvantaged bank customers,
would-be customers and communities is how will it benefit them -
to which locations can one realistically expect the banks to roll-out
their pilot scheme?
The scheme's only criteria:
- an existing bank branch
- no other bank within a 5 mile radius
do not, of themselves, provide evidence to support rollout to:
- deserving communities which have already lost all their banks; and
- expanding/re-vitalised communities which should have a bank branch;
both of which would require an individual bank to take the initiative and open a "shared
branch" taking into account projected other bank handling fees as
part of the financial assessment. How likely is this to happen?
Similarly, based on the results of a largely "remote rural" pilot scheme, where will be the evidence the banks are likely to demand before rolling out the scheme to selected suburban, inner city and estate type situations where geographical distance is not the problem, rather time, traffic, parking, obstruction, deprivation, etc. Again, where all local banks have already closed in these locations which bank is likely, voluntarily, to take the initiative to re-open on a "shared" basis?
Formats
Lastly, by adopting such narrow criteria an ideal opportunity to test operationally other formats:
- the neutral multi-bank outlet (as theoretically validated by Loughborough University Banking Centre and advocated by CCBS and others)
- partnership operationally with credit unions, etc
- co-location of a multi-bank facility, open to all types of customer, along side a post office franchise
- a multi-bank mobile;
has been lost. Will there be adequate time to test these and other options, and develop the appropriate legal and operating framework, before branch closures have to resume? To quote an independent banking consultant writing very recently in a banking industry newsletter, in support of the outsourced shared branch/community bank principle advocated by CCBS, "speed is of the essence…………….. let us not come along with the right medicine after the patient has died!"
DEREK FRENCH
DIRECTOR
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