Tuesday, 5 December 2017

RBS: Online Banking Partly to Blame for 62 Closures

Royal Bank of Scotland's (RBS) decision to close 62 mostly rural branches in Scotland has been met with plenty of protests amongst both customers and activist groups. RBS says that online banking is partly to blame for the closures, but at least one citizen's group doesn't believe them. They are accusing RBS of closing the branches strictly out of greed.

It is always a touchy situation when a large company with an extensive list of brick-and-mortar locations decides to close some of their local outlets. In the RBS case though, the sting of closing 62 branches is much more painful due to the bank's promise – a promise they reiterated many times in years past – that they would not close a branch even if they were the last bank in town.

That promise is at the forefront of action being taken by the Unite union to try to force RBS to maintain the status quo. Unite is hoping Scotland's government will get behind their efforts as well. The Scottish government is a part owner in RBS.

Business Minister Paul Wheelhouse initially responded to the Unite request by reminding those concerned that authority over banking remains the domain of the UK government. There's not much the Scottish government can do other than work with customers and citizen groups to try to convince RBS to change its course of action.

Dwindling Customer Use


For their part, RBS has said that closing the local branches is the result of changes to how people are using bank services. Prior to the internet age, the local bank branch was the lifeblood of both retail and commercial banking transactions. That is no longer the case.

RBS maintains that the number of customers making use of branches in Scotland has dropped by nearly half over the last five years. In announcing the closures, the bank noted that branch use had fallen by 44% over last five years while mobile banking has increased 39% in just the last two years.

Should RBS go ahead with its plans, customers will not be left without banking solutions. The bank says that customers would still have access to a community banker or mobile branch. RBS customers will be able to continue accessing bank services online as well.

So the question is this: are the closures really all about money as Unite contends, or is RBS justified in trying to cut its operating expenses by eliminating branches that are now seeing half as much traffic as they were seeing back in 2012? Unfortunately, there is no simple answer.

The internet age is a wonderful age in which to live. However, the expansion of online access is not without its drawbacks. It is not reasonable for us to expect an organisation to make themselves as efficient as possible through online means while, at the same time, continuing to do things in older, less efficient ways to satisfy those unwilling to embrace the new. We cannot move forward without leaving something behind.

No comments:

Post a Comment