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‘Welcome back to local banking’: TSB shut 411 branches since its claim

When TSB relaunched in 2013, it sold the dream of a return to good old fashioned local banking, since then it has announced the closure of all but 220 branches

‘Welcome back to local banking’. When TSB returned with great fanfare in autumn 2013 that was the message it trumpeted.

The bank being newly spun back out of Lloyds banged that local banking drum all over the place.

Branches were wrapped in giant banners, chief executive Peter Pester sprinkled the phrase about in every interview he did, and a cartoon advert hit TV screens and even cinemas.

This sentimental little number told how in 1810, the Reverend Henry Duncan ‘built a bank whose sole purpose was to help hard working local people’ and it showed a journey through the years, with an animated history of how Britain’s industry and towns grew up.

Splashed through the video were mentions of things like ‘serving the community’ and at the end, after hard times had fallen, new hope was delivered by the discovery of that long, lost bank branch by a little girl.

The end line? Of course, it was that slogan: ‘Welcome back to local banking’.

You can imagine that any customers or small businesses who fell for the marketing and signed up to TSB for that pledge of local banking will have been mightily annoyed in recent years.

The self-styled champion of local banking has been busy shutting branches and this week announced the closure of another 70.

In September 2013, when I went to TSB’s media launch to be sold the local banking dream, Mr Pester and his fellow executives were very keen to tell us about its 631 branches across the country.

Here was a ‘challenger’ bank – a term we somewhat disputed considering its heft and age of 203 – that was really different, claimed TSB.

It wasn’t just one of these new digital-only banks. It had people, making decisions for local communities, in real-life branches.

How many of those 631 branches do you think are left?

After this latest round of closures, it will be just 220.

Of course, banks closing branches is nothing new. One of the things that made TSB’s posturing stand out in 2013 was that it was doing the local branch routine in the face of lots of banks already shutting their doors.

Look down TSB’s list of branch closures, or those of its big rivals, Lloyds, Halifax, Barclays, Santander etc and you start to notice something though.

It’s not just the smaller, out of the way, or less affluent places that are losing bank branches hand over fist 

It’s not just the smaller, out of the way, or less affluent places that are losing bank branches hand over fist. The closures are now hitting well-off towns and cities, where customers probably thought they’d always have their bank.

Think St Albans, Chipping Norton, Hitchin, Ilkley, Wilmslow, Tunbridge Wells, which all feature on TSB’s 2020 to 2022 closures.

Now I must admit that bank branch closures are not something that particularly irk me on a personal level.

I’m sure many readers will share my desire to avoid having to go into the bank at all costs. If I can do it online or via the app, I will.

Partly, this is down to the apparently ‘improved’ experiences that our banks have offered us in branch over the years.

Typically, this consists of walls of machines in a huge empty space, with some staff who can’t actually help you directing you back to the machines you didn’t want to use, and a long queue for the one or two cashiers who could help you.

There may also be some chairs where you can wait for 45 minutes for some precious time with the ‘people who sit behind computers’ at their divided off desks.

Covid has helpfully introduced an extra bank torment – reduced opening hours.

If you are really lucky you get bank branch bingo: entry after a queue outside, on your second trip there as it was shut first time, a machine that doesn’t work, a line for a cashier who can’t help, and then a half hour wait to get into Dividerland to speak to one of the people behind a computer.

Faced with this, it’s little surprise that many are a bit apathetic about branch closures.

TSB even wrapped its branches in giant banners selling local banking

TSB even wrapped its branches in giant banners selling local banking

But TSB was right back in 2013, local banking at branches matters.

Some cannot do their banking online, or do not want to, so they are important for older people, the non-digitally savvy, and small businesses.

But branches also have something very important in banking for the economy: local knowledge.

This was highlighted in the wake of the financial crisis to great effect by businessman and friend of This is Money, Dave Fishwick, with his Bank of Dave book and TV series about trying to start a local bank to help the people and businesses of Burnley.

It showed how in the rush to big banking, we’d lost that vital local knowledge that can help grassroots entrepreneurialism.

However, for all its great claims, TSB got quite grumpy with me eight years ago when I asked the inconvenient question of where lending decisions would be made for small businesses.

Because the answer was centrally, not locally. We wrote about that, pointing out how those with local knowledge were likely to have a better idea of whether a small business or entrepreneur would succeed and should get that all-important loan.

Speak to the banks and they’ll tell you that they are only responding to customer demand – and their clever technology and smart centralised teams can assess local small businesses and get money to them.

You can’t help but feel that in terms of helping the economy, we’re missing a trick here though.