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In the light of today’s report by POSTCOMM and the current review by government of the future of the post office rural network, it is appropriate to re-state the position of the Campaign for Community Banking Services (CCBS).
CCBS has always seen the role of post offices as complementary to that of bank branches in the provision of transactional banking, particularly in the smallest rural communities unable to support either individual banks or a directly managed shared banking outlet.
Post offices are generally unsuitable to act as a multi-bank substitute for both business and personal use because of limitations on space and the security risk; also a franchised ownership structure that militates against the funding of necessary improvements In a confined space increasing sales activity conflicts with need for quick transactional service.
In choosing to become a direct competitor of the banking sector in the sale of branded financial services, in partnership with the Bank of Ireland, the Post Office has effectively ruled itself out as a neutral banking channel. Banks responsible for over 60% of the nation’s personal current accounts have, understandably, declined to enter a relationship which entails paying a competitor to take sales opportunities away from them in towns and cities across the country.
In its review the government needs to look at ways in which bank shared branching and post offices can co-exist, and compete, in larger communities whilst co-operating in rural communities where sales opportunity and conflict is minimal. To ignore the conflict exists is a recipe for never solving the problem.
Contact: : Derek French, Hon Director CCBS Tel 01582 764760
Notes
- CCBS is a coalition of 28 national organisations concerned about bank branch closures, financial exclusion and community sustainability. www.communitybanking.org.uk
- Shared branches provide a common counter service to customers of all banks ; the model has been academically validated in the UK and operates in the USA.
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