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

Finacial products from our partners
Property search
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

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    SThree: Talent Acquisition Consultant

    £22500 - £27000 per annum + OTE £45K: SThree: Since our inception in 1986, STh...

    Recruitment Genius: Experienced Financial Advisers and Paraplanners

    Negotiable: Recruitment Genius: This extremely successful and well-established...

    Guru Careers: FX Trader / Risk Manager

    Competitive with monthly bonus: Guru Careers: We are seeking an experienced FX...

    Day In a Page

    Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

    Making of a killer

    What motivated a shy student to kill 38 holidaymakers in Tunisia?
    UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

    Just when you thought your commute couldn't get any worse...

    Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
    Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

    The Real Stories of Migrant Britain

    Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
    Cheaper energy on the way, but it's not all sunshine and rainbows

    Cheaper energy on the way, but it's not all sunshine and rainbows

    Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
    Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

    No grace of God for Katy Perry as sisters act to stop her buying convent

    Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
    Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

    Residents just want water and power in a city chosen to be a ‘smart’ metropolis

    The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
    Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

    Something wicked?

    Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
    10 best sun creams for body

    10 best sun creams for body

    Make sure you’re protected from head to toe in the heatwave
    Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

    Nick Bollettieri's Wimbledon files

    Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
    Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

    There is more than a shiny trophy to be won by England’s World Cup women

    The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
    How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

    How to stop an asteroid hitting Earth

    Would people cooperate to face a global peril?
    Just one day to find €1.6bn: Greece edges nearer euro exit

    One day to find €1.6bn

    Greece is edging inexorably towards an exit from the euro
    New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

    'Iron Man' augmented reality technology could become reality

    Holographic projections would provide extra information on objects in a person's visual field in real time
    Sugary drinks 'are killing 184,000 adults around the world every year'

    Sugary drinks are killing 184,000 adults around the world every year

    The drinks that should be eliminated from people's diets
    Pride of Place: Historians map out untold LGBT histories of locations throughout UK

    Historians map out untold LGBT histories

    Public are being asked to help improve the map