The rise of the "branchless bank" has benefited most customers and retailers, such as supermarkets, who have entered the financial market, according to a new report.
Nearly one in five branches disappeared between 1989 and 1995. Banks and building societies have been reducing the number of branches since the mid 1980s, although the process accelerated in the early-1990s recession.
"At-a-distance" banking has brought many benefits to customers, researchers from Bristol University found. For example, telephone banking is convenient and accessible, and lower operating costs mean such banks are able to offer highly competitive rates of interest.
But low-income families have suffered because of this. The study, funded by the Economic and Social Research Council, found that closures were more likely to happen in poorer areas, whereas the more affluent were more likely to keep their local branches.
Moreover, because of their low incomes, and where they live, such people are more likely to be subject to exclusion by the credit-scoring systems - which look at things such as income level, how your account is run, bad debts - and increasingly used by banks and building societies to determine who are "good" and "bad" customers.
Such systems are substituting for the judgement of local branch managers, who used to use their day-to-day knowledge to determine who was a good or a bad risk Glenda Cooper