Do we really need bank branches anymore?

Building society and bank networks have shrunk by half in the last 30 years.

Last week, Nationwide announced the closure of 25 branches.

Meanwhile, HSBC will shut 40 branches for good in 2012 while 58 will disappear at Santander. It's not a new trend, as the number of bank branches on our high streets has been shrinking for decades.

In fact, 30 years ago there were 21,592 branches across the country. Now? The figure has fallen to 11,455.

The same fate has hit the Post Office network which has almost halved from 22,405 branches in 1982 to just 11,677 today.

Will the trend continue until branches become hard to find? And does it matter, anyway, as more of us move to doing all our banking online and by phone?

It's clear there is still a huge demand for branch banking, yet maintaining a large network costs millions. Those who never venture into a branch anymore would suggest the cash could be better spent by improving products and service.

"We've spent a long time and a lot of research agonising over this issue," admitted Matthew Wyles, group distribution director at Nationwide. "Our conclusion is that we believe branches have a strong future, but a different future to their past."

He believes that any financial institution that wants customers across the country has to provide a branch network.

"There are certain types of services and products that are ideally suited to the future role of the branch," he said.

But it's not cashing cheques or depositing savings that will be the key, he said, but bigger issues such as buying a mortgage, managing assets or sorting out a pension or tax.

"Consumers then want face-to-face conversations they can only get in a branch," Mr Wyles added.

All the main banks and building societies stress the importance of branches.

HSBC said: "Our branch network is a critical channel for our customers," while according to Barclays: "Our customers are our main focus and it's essential to stay committed to the branch network."

So why all the closures? Santander said it's about "consolidation". That means closing branches where they have two or more close together because of mergers, the same reason for the bulk of closures of Nationwide's branches. But behind the gloom is hope for more branches.

For starters, Santander plans to open 25 branches in the next year "in places where we currently don't have a presence". At the same time, M&S Bank will open 50 branches by the end of 2013. Yorkshire building society is adding 12 branches, while Metro Bank promises seven more. Also, the Co-op has begun a programme of new, in-store banks.

"Retailing is changing," said Mr Wyles. "Branches must be located where customers are."

As shoppers switch to online and large, retail centres, so banks and building societies will reflect that.

In other words, we may end up with fewer branches, but they'll be where we want them.