At the Morningside branch of the Commercial Bank of Scotland in Edinburgh in the early 1940s, Mary Loader, a clerk, wore regulation long sleeves and very demure clothes. The customers all carried bank books filled out in fine copperplate script and every one of them knew the bank manager. 'It was strict and very formal,' recalls Mary, now 74 and living in Shoreham-by Sea. 'You called everyone 'sir'. But you knew all the customers. The bank manager was king of the local neighbourhood. My father was a schoolmaster and he respected the bank manager - in line with the parson - no end.

'Now there is no such thing as a bank manager, only area managers. I wouldn't know my bank manager if I fell over him.'

To today's hard-headed financial boffins, the popular vision of the high-street bank run by pompous but trustworthy Captain Mainwaring types, with smiling tellers who knew your name and staff who really did have your best interests at heart, is as real as John Major's vision of carefree spinsters riding bicycles to church and friendly bobbies saving young lads from a life of crime with a quick clip round the ear.

This week Martin Taylor, the new chief executive of Barclays, said that people had forgotten that banks were businesses, not quasi-social institutions. He announced that he would press ahead with 5,000 job cuts despite unexpected six-month profits of pounds 1.4bn. Consumer groups said the decision added insult to injury for thousands of customers plagued by indifferent service and high bank charges. 'Commercial madness', barked Bifu, the banking union; while small businesses fumed at the 'ruination' of Britain's high-street banking system.

The public's conviction that the banks have fundamentally changed and lost their personal touch is bolstered by large-scale redundancies at a time of unexpected profit. Since 1991 Barclays has shed 16,000 jobs from its branch network. It has closed 900 of its 3,000 branches since the early Eighties. The other big banks have also rationalised. Bifu claims that 100,000 banking jobs have been axed in the past four years.

Eddie Weatherill, of the Independent Banking Advisory Service, which represents disgruntled consumers and small businesses, says that public dissatisfaction with high-street banks is far more than misplaced nostalgia. He claims the remnants of the old ethos were still around in the Sixties, when the bank manager was still a respected professional and the hole in the wall and computer software had not replaced the human teller.

He says: 'Bank managers were sober and they did not take risks. But they knew you and your community. In the 1960s you were lent money on the merits of your project and the manager's opinion of you. By the 1980s it was a question of what you could put up for security. The trustworthy, honest bank manger has been replaced by a pin-striped shark.'

According to the National Consumer Council (NCC), the number of customers 'very satisfied' with banking service has almost halved, from 62 per cent to 34 per cent, in the past 10 years. An NCC survey in December found that one in five people had had problems with direct debits or standing orders, one in seven had had an incorrect amount taken from their accounts, and one in eight were wrongly charged. Barclays was considered an 'average' performer while Lloyds and the Midland were below average and the National Westminster well below. The council claims that the voluntary code of practice adopted by banks two years ago in the face of consumer criticism is not working.

Robert Breckman, an accountant, is currently taking the NatWest to court claiming pounds 25 for an alleged error. In his one-man campaign against bank inefficiency, several banks have already paid him compensation for errors in his personal account. 'There has been a terrible deterioration in service in the past three years. I just wish more people would take action,' he says.

In the past decade banks have undergone a revolution. Financial services are now on offer, functions are centralised in super-branches and staff are encouraged to specialise. Mr Weatherill claims the bank manager and his staff are now primarily a sales force, and the notion of the bank as an independent adviser is lost. 'The banks have turned from customer service to pure profit organisations. The problem is that at first the public did not notice.'

Lorna Smith, made redundant by Barclays three months ago after 14 years' service, believes that the switch to selling is linked to the public perception of poor service. 'Staff morale was low when I left. Everyone was under so much pressure. When I joined, banking was about serving the customer. Now we are trained to push financial services and packages that customers might not need or want.'

While the hard sell is officially discouraged, she believes it is inevitable. 'If a customer paid in a large cheque over pounds 2,000 or pounds 3,000, you were told to sell them something or ask them if they wanted to see a financial adviser. Initially there was no great pressure but eventually you were expected to have leads every week, just like a salesman. Poor leads meant a bad staff report.

'You were getting a lot of cheek across the counter. Sometimes you sympathised with customers about charges, long queues and too few counter staff, but there was nothing you could do about it.'

Professor Nigel Thrift, of Bristol University's geography department, is studying the wider community effects of bank closures in Britain. He says high-street banks in the United States have already withdrawn from poor inner-city and rural areas where the new financial services do not sell. In the past decade they have become concentrated in the affluent city suburbs, creating the 'doughnut effect'.

According to Bifu, communities in Britain are already suffering the same fate. Pat Conaty, of Birmingham Settlement, a community project, complains that the withdrawal of banks from deprived inner-city Aston is 'writing off the community'. In the past five years all but five of the 25 banks and building societies which operated there have closed. 'If the bank puts up the boards and moves out of the high street it sends out all sorts of terrible messages. It starts a stampede. It puts the skids under the community.'

Earlier this year the pit village of Cotgrave, Nottinghamshire, demonstrated together with bank staff after the TSB, the village's only bank, announced it was pulling out. Community leaders said the bank was forsaking its responsibility to miners who had invested redundancy money with it.

But John Aitken, an analyst at the Union Bank of Switzerland, dismisses the notion of banks having community or social responsibility as nonsense. If banks played a greater social role in the past, he claims, that was only because the market was less competitive. 'It would be insane for a commercial bank to have a social role. It would bust the bank. That is a public-sector role.'

Mr Aitken agrees that banks have lost out to building societies with the high-street consumer. In the past 20 years, building societies have taken pounds 100bn of new money from depositers. Banks, concentrating on corporate lending and international business, have taken a third of that. For banks the only way back to the man in the street may be to buy building societies, as with the proposed merger of Lloyds and Cheltenham & Gloucester.

But Mr Aitken believes that the switch to building societies is less to do with customer dissatisfaction than with the tendency of people in the property-boom Eighties to open accounts with the building societies who provided them with mortgages.

While lack of investment in some high-street banks may have led to poor service in some places, Mr Aitken believes customer whingeing is unjustified. 'Consumers feeling they have been ripped off is nothing new. The profit announced by Barclays is not that great for an institution that large. A less personal service has to be seen against much lower costs. The reality is that banking costs have never been lower.'


Bruce Margrett, 50, is one of a dying breed - the original local bank manager. When he left school in 1961 to join Barclays he started right at the bottom as 'stamp licker' in the Brighton branch, but dreamt of rising to manager.

For middle-class children who failed to make the grade, or working-class ones too poor for higher education, banking offered a stable, respectable profession with unquestioned social status.

Last year, his goal long achieved, Mr Margrett retired early from the profession he loved. Barclays was beginning to rationalise 100 banks in the South-east under the control of 10 mega-branches. 'I just didn't feel part of it any more,' he says.

'My father worked for Barclays and it broke his heart when I joined. He wasn't a bitter man, but he said you had to wait until someone died before you got promotion. It was time served, not merit. But that changed after I joined. 'There was a clear career structure and you knew your place in the chain of command. I changed to the colour the bank demanded. If you wanted to be a bank manager you had to behave like a bank manager. It was crucial to look the part.'

Mr Margrett was 40 before he discovered how convincing the act had become. 'On holiday someone guessed I was a bank manager from a fleeting glance. I was so upset I took to wearing Bermuda shorts and growing my hair long.'

Developments in the past five years have turned Mr Margrett's professional life upside-down. 'I was a general practitioner, trained for 32 years to handle Aunt Flo's small overdraft and major loans for local businesses.' There was no place for men from the old school in the new world of specialised and centralised banking services.

'For years, when you applied for jobs they were interested in your trustworthiness and the speed and accuracy of your work. In the past four years they have only been interested in your ability as a salesman. Banks used to be about people, but now they are money-making machines.'

Mr Margrett argues that today's bank staff are more highly qualified and the business, through technology, much more efficient, but the switch to selling worries him. Staff, he claims, are stressed with the pressures of selling.

When head office told managers last year that they had 'seen nothing yet', Mr Margrett, now a part-time barrister's clerk, decided to retire.

'I have one son and I advised him to avoid a banking career. Bless him, he did as I said.'


In an article on banking, 'Overdrawn on goodwill', on 13 August, survey research attributed to the National Consumer Council was in fact carried out by the Consumers' Association. We apologise for this mistake.

(Photographs omitted)