Banks go hi-tech and bring back the good old days

They're putting mobile branches in rural areas and all their services on our mobile phones. Sam Dunn asks if this mix of past and future will really help consumers

It's called mobile banking but the term takes in two very different things at both ends of the evolutionary scale.

By December, it was revealed last week, many of us will be able to use our mobile phone handset as a virtual ATM - short of it spitting out cash, of course. We'll be able to initiate a balance enquiry, see a mini statement of recent transactions and, for pay-as-you-go users, top up credit using bank details stored in the handset - doing away with the need to use a credit card or retailer.

MobileATM, a joint project between technology company Morse and major banks - with First Direct leading the way - is a leap forward from the simple text message alerts of bill payments already offered by many high-street banks.

In Japan, thousands already use credit stored in their mobile phone software to pay for small goods such as soft drinks, papers and cheap rail tickets.

But at the other end of mobile banking's frontier, things are moving at a far slower pace. Later this year, a large van decked out inside as a bank branch is set to trundle through Cornish lanes visiting homes in isolated areas. It will provide basic facilities, allowing customers to make cheque and cash deposits, and exchange currency.

NatWest is the driving force behind this initiative, picking up where HSBC left off in January when it abandoned the same rural service as "uneconomic".

However, be it cutting- edge technology or a lumbering four-wheeler, 21st- century banking is about choice and giving customers what they want.

That, at least, is what the banks tell you. Ask consumer groups and you'll hear a different story.

Which?, for example, is continuing its firestorm of protest at banks' treatment of customers. Its latest report, Give Us Back Our Money, details the many wheezes used by banks - such as flat fees on card purchases made abroad - to rack up billion-pound profits each year.

"There are clear signs that they're ripping people off. They need to start treating customers much better," the research thunders.

There's disgruntlement too from the Campaign for Community Banking Services (CCBS), which is lobbying for an unbranded "shared bank" in rural areas. In May, its proposal that all customers be allowed to use a single front office for basic services was rejected by the British Bankers' Association (BBA) on grounds including anticipated low use and the growth of internet banking.

Derek French, director of the CCBS, called this a "blinkered approach".

So who's right?

The answer may lie somewhere in the middle - consumers do have a bit more choice and it is up to them to follow the best deals. After all, no bank always gets its service right or offers the best rate of interest.

But one thing is certain: in their hunt for new customers, banks are switching their focus to what was once considered an outdated concept: the branch.

Consultancy Booz Allen Hamilton recently revealed that 80 per cent of bank/ customer relationships are forged in the branch.

And the growing realisation among banks that they have missed a customer service, and sales, trick is now fuelling huge investment in the UK's network of branches.

NatWest is midway through a £150m refurbish- ment after reversing a programme of branch closures at the turn of the century. It now has 1,630 branches, just down on 2000's 1,643.

HSBC, meanwhile, is spending £80m on upgrading interiors, and during lunchtime priority goes to its existing customers.

And with the arrival of new financial advice rules allowing banks to sell not just their own products but insurance, pensions and investments from other providers - so making commission - they are rushing to build more private "interview" areas inside their branches.

NatWest, HSBC and Barclays have all introduced 1,000 extra "front-line" staff during the past year to try to improve customer service.

It's a far cry from the closure programmes of the 1990s, when the branch was seen as an expensive liability compared with the seemingly boundless opportunities offered by internet banking.

In 1999, there were 11,497 branches, says Brian Capon of the BBA. "At the end of 2004, the total was 10,388. It's not the fall that people anticipated."

One in five savings or current accounts are now set up for internet banking, though, against barely 1 per cent only six years ago.

But the force is with branches. Lloyds TSB is just one bank pursuing the "back to the future" policy last in favour in the 1960s. It is giving power to local branch managers to open on bank holidays in shopping centres or late in the evening for commuters, and to resolve customer complaints locally.

More than 60 per cent of Lloyds TSB's customers now use a branch at least once a month, says Graham Lindsay, head of the bank's branch network. "With their more complex product purchases, they still want to talk to somebody."

Anyone thinking of switching as a result of the current account war (see News, page 23) should ask exactly what they want from a bank before plunging into the latest head-line-grabbing deal, says Which?'s Melanie Green.

High savings rates are no longer restricted to online accounts; service isn't always best face-to-face (witness First Direct's success in customer satisfaction surveys); and current accounts with fees are rarely good value for money. So check before you choose.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
Lou Reed distorted the truth about his upbringing, and since his death in 2013, biographers and memoirists have added to the myths
musicThe truth about Lou Reed's upbringing beyond the biographers' and memoirists' myths
Ed Miliband received a warm welcome in Chester
election 2015
Life and Style
Apple CEO Tim Cook announces the Apple Watch during an Apple special even
fashionIs the Apple Watch for you? Well, it depends if you want it for the fitness tech, or for the style
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

    Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

    £50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Ashdown Group: Training Programme Manager - City, London

    £40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

    Day In a Page

    NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

    Who's monitoring the outsourced NHS services?

    A report finds that private firms are not being properly assessed for their quality of care
    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

    The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
    How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

    How do Greeks feel about Syriza?

    Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
    From Iraq to Libya and Syria: The wars that come back to haunt us

    The wars that come back to haunt us

    David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
    Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

    Too busy to surf? Head to The Pool

    A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
    Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

    UK's Major Tum to blast off on a spice odyssey

    Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
    John Harrison's 'longitude' clock sets new record - 300 years on

    ‘Longitude’ clock sets new record - 300 years on

    Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
    Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

    Let the propaganda wars begin - again

    'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
    Why Japan's incredible long-distance runners will never win the London Marathon

    Japan's incredible long-distance runners

    Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
    Why does Tom Drury remain the greatest writer you've never heard of?

    Tom Drury: The quiet American

    His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
    You should judge a person by how they peel a potato

    You should judge a person by how they peel a potato

    Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
    Beige is back: The drab car colours of the 1970s are proving popular again

    Beige to the future

    Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
    Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

    Bill Granger cooks with fresh cheeses

    More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
    Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

    Shay Given: 'This FA Cup run has been wonderful'

    The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
    Timeless drama of Championship race in league of its own - Michael Calvin

    Michael Calvin's Last Word

    Timeless drama of Championship race in league of its own