Santander, one of the UK’s leading banks, has announced plans to close almost a quarter of its UK branches. This move follows a growing trend among high street banks, reflecting changing customer behaviour and the rapid shift towards digital banking. But what does it mean for communities and customers who still rely on physical branches?
Santander Confirms 90 Branch Closures
Santander confirmed it will shut 90 branches across the UK by the end of 2024. This decision will leave the bank with 327 branches, down from the 417 it currently operates. The closures represent nearly 22% of Santander’s branch network.
According to Santander, footfall at many locations has dropped significantly. The bank reported that branch transactions fell by 40% over the past three years, while mobile and online banking usage surges. Mike Regnier, Santander UK’s Chief Executive, stated, “the way customers manage their money is changing, and we need to adapt.”
Why Are Branches Closing?
There are several reasons behind the closures. The main factor is the increasing shift towards digital banking. The COVID-19 pandemic accelerated the trend, pushing more customers to use online services instead of visiting physical locations. Santander revealed that 80% of its customers now primarily use digital platforms for their banking needs.
Additionally, running physical branches comes at a cost. Maintaining buildings, utilities, and staffing each location requires significant resources. With fewer customers using branches regularly, banks see an opportunity to streamline operations.
Santander also highlighted the need to focus on investing in its digital services. The bank plans to expand its online support and call centres to ensure customers can still access help when needed, despite fewer physical branches.
Impact on Local Communities and Customers
While many customers have embraced digital banking, branch closures pose challenges, especially for elderly customers, small businesses, and rural communities.
Age UK has raised concerns over branch closures disproportionately affecting older people, many of whom are less comfortable using online banking. In a recent statement, Caroline Abrahams, Charity Director at Age UK, urged banks to ensure “there are still ways for older people to access services face-to-face.”
The Federation of Small Businesses (FSB) has also expressed worries. Local branches are essential for small firms’ daily operations, particularly those that deal with cash. Losing access could increase the time and cost involved in managing business finances.
Some communities are now at risk of losing their last remaining bank. Research by Which? states that over 5,800 bank branches have shut across the UK since 2015. Santander’s decision adds to a growing list of closures by other high street banks, including Barclays, NatWest, and Lloyds.
Support Options for Affected Customers
In response to public concern, Santander has announced several measures to support customers. The bank has pledged to keep at least one branch open within three miles of affected locations. For rural communities, however, this may still pose an accessibility issue.
Santander also plans to work closely with the Post Office. Customers can carry out essential banking services such as withdrawals, deposits, and balance checks nationwide at over 11,500 Post Office locations. Additionally, the bank is expanding its mobile app and phone support to provide more personalised assistance.
Mike Regnier emphasised that the bank remains committed to “serving customers however they choose to bank with us.” The focus is now on balancing investment in technology with ensuring vulnerable customers are not left behind.
The Bigger Picture: The Future of UK High Street Banking
Santander’s announcement reflects a broader shift across the UK’s financial landscape. High street banks are adapting to meet evolving customer preferences, which comes with consequences.
The Financial Conduct Authority (FCA) has highlighted that banks must consider the needs of all customers when planning closures. In September 2023, the FCA introduced new guidelines requiring banks to assess the impact of branch closures and provide clear communication well in advance.
At the same time, the rise of fintech services, online-only banks, and contactless payments has transformed how people manage money. According to UK Finance, nearly 93% of adults in the UK used online banking in 2023, signalling a continued move towards digital-first services.
However, critics argue that financial inclusion should remain a priority. Access to cash, in-person advice, and local banking services remains crucial for many groups. Campaigners call for more investment in banking hubs and shared branches, especially in areas where multiple banks have withdrawn.
