Although the banks are increasingly using radial mileage from branch to branch for network decision making, distance from alternative banking locations is not the principal determinant of a branch’s value to its customers and host community. It has always been CCBS’s argument that a banking facility is an important constituent of the critical mass of services which retains and/or attracts economic activity and sustains viability, irrespective of distance to the next centre. Likewise the strength or weakness of a community’s retail offering impacts banking behaviour.

The density of population and businesses, from which branch using customers would be drawn to the branch is, however, an important factor but distribution of population/businesses within the selected radius, in relation to the pull of, and journey time to, alternative banking sites is crucial.

In theory a sole bank would be expected to draw on population up to ½ the distance to the next nearest banking facility, and there is some evidence to support this in the more remote rural situations in which shared banking was offered during the 2002 pilot scheme. However, in an urban scenario, and less remote rural locations the situation is likely to be more complex and has not been tested using shared banking options which, of course, do not involve a change of banking relationship.

Unfortunately the BBA’s discredited shared banking pilot scheme was heavily concentrated on small communities where the incumbent sole bank was historically market dominant amongst those branch dependent bank customers closest to the pilot branch location. It was not, therefore, a realistic test of demand from customers of other banks. In some cases these were located nearer/more convenient to a branch of their own bank; in one extreme case over two thirds of the “eligible” population and businesses mailed were in that position.

Although mileage band bank to bank cannot be directly equated with the following data, from Banking Without Branches January 2000, what this information does reveal is the major sensitivities of the impacts to the mileages selected.