The banking sector has been hit hard by a series of "restructuring" exercises - some 150,000 jobs have been lost over the past seven years - but there is more to come, analysts believe. Apart from the intervention of companies such as egg, Tesco, Sainsbury and Virgin, there is also the growing use of new technology.
Increasing numbers of customers are indulging in armchair banking. Telephone call centres, a far cheaper means of conducting transactions for banks, are now the fastest growing sector in the industry. "Banks are very aware that people are going to be conducting their banking affairs at home," said Jeremy Batstone of NatWest Stockbrokers. Morecustomers are also using the Internet, while digital television can be used for a similar purpose.
Mr Batstone said that before the late Eighties a job in banking was seen as a "job for life", but tougher competition had put paid to that. Banks wanted to replace staff with technology, he said. Unifi, the banking union, fears that the high street could be inundated with completely automated banks in which customers would "interact" with machines and screens rather than speak to staff.
Ian Hodges, an analyst at Barclays Stockbrokers, said banks needed to encourage customers away from branches. He said: "The challenge of the last 10 years, and perhaps the next 10, is to introduce new technology and reduce costs without alienating the existing customer base. Banks need to be careful they do not drive away profitable customers."
Banks are aware that they cannot go too far and the speed of branch closures has slowed. Managers know that customers often prefer to speak to a human being rather than a machine.
Even Lloyds, regarded as one of the more efficient companies, apparently realises there is nothing better than face-to-face contact for selling financial products but "backroom" work is being centralised.
Presumably there will always be "difficult"customers who will insist on using the local branch. So for the foreseeable future there will continue to be a "high street bank". Increasingly however there will be little going on behind the front desk
Barrie ClementReuse content