Simon Read: Does it matter that banks are slashing their branch networks when saving money could help customers?

The eagle has flown: with Barclays saying that some traditional branches will go over time, communities may be the poorer as banks retreat (Rex Features)

A story spread in the media this week suggesting that Barclays' boss Antony Jenkins is planning to shut 400 branches. According to the story, he aims to take an axe to the branch network to cut costs.

The bank was quick to issue a denial. In a statement it said: "We have no plans to announce significant reductions to our UK branch network."

As denials go, that's pretty straightforward. But the rest of the statement is a little more chilling for those that value bank branches. Barclays said: "Over time, there will be fewer traditional branches as we move to provide banking services to customers where and when they find it most convenient."

That's easy to translate. It means the bank expects to do more business online, even through your phone while you're on the move, rather than in traditional branches.

And if you want a traditional banking service that you feel has to be done face to face, such as paying in cash or cheques, it will increasingly be offered to you at a "convenient" location, such as a supermarket.

Barclays has already set the ball rolling in that direction by launching a pilot scheme of small in-store branches at some Asda supermarkets. It's not difficult to predict that the pilot will sooner or later be rolled out across the Asda network, leaving there little need, in the bank's eyes, to maintain many of the branches which are near supermarkets.

Will other banks do the same? The truth is that it's an expensive business maintaining a branch network. Cut the number of branches and you cut costs. That could potentially lead to better deals for customers – higher savings rates and lower loan costs – if banks can save millions.

According to the Campaign for Community Banking Services, new strategy announcements are due this month from RBS/NatWest and later in the year from Lloyds. The latter set a moratorium on branch closures but that is due to end in February 2015.

Meanwhile HSBC's substantially reduced branch network, at 1150, is already the smallest of the big four brands and began 2014 with notices to withdraw from more small towns and suburbs across the country.

Banking insiders tell me that 750 branches is the ideal target. It's enough to give a decent spread across the country, giving almost everyone close enough access to a branch. Barclays has 1,600, so it's clear that there's plenty of scope for further cutbacks at the bank.

And slashing a branch network to get closer to the magic 750 mark would still allow a bank to continue to claim that it is a local bank with a branch close to most of its customers.

Of course there are many people that don't use a bank branch any more. Some may therefore applaud cutting back on branches in the expectation that the savings will be passed on to customers.

There's fat chance of that, based on the big banks' recent record. Their actions would suggest that savings will lead to bigger profits, not better products.

But whatever your view on branches, we should lament their disappearance from many high streets. Why? Because they are essential to local communities. In every village or town across the country where the last bank has left, it's been the death knell for local shops.

But let's be honest, Barclays' move, and cutbacks by its rivals, won't mean the end of local bank branches. The big outfits know that their branches are crucial in giving them access to their customers so they can flog them mortgages or other products.

But what we should be fighting is the withdrawal of banking services altogether from some areas. The Campaign for Community Banking Services reckons there are 421 rural communities where only one bank remains and 466 urban communities.

It's these locations we should fight to protect while banks should be forced to stick to pledges that they won't leave communities unbanked.

s.read@independent.co.uk

Twitter: @simonnread