RUTH SUNDERLAND: Blow for TSB customers with more branches closing as people migrate to online banking
Banks have so far managed to avoid making themselves major villains in the pandemic.
Unlike some insurers, which have tried to wriggle their way out of paying valid claims to small firms, they have been working with the Government to support business and families.
Covid-19 has presented our High Street lenders with an opportunity to repair their reputations after the financial crisis and, in fairness to them, they have at least tried to do so.
LIfeline: The branch closures at TSB are part of a wider story of life draining out of our High Streets, which has been exacerbated by coronavirus
Which is why it is so disappointing to see extensive branch closures from TSB.
It’s all the more galling because, when it span out of Lloyds a few years ago, the bank set out its stall as an ethical, community-based lender that was different from the rest.
That will be far harder to achieve online, with fewer branches and less of a human touch. Nor do the bank’s previous IT meltdowns inspire confidence in its digital offerings.
It claims more than 90 per cent of customers will be within 20 minutes of a branch, but that’s by car or public transport and so not terribly comforting to older people who no longer drive and do not want to use a bus or train because of the virus.
Chief executive Debbie Crosbie is trying to making the best of a very difficult situation.
She is accountable to Spanish owners Sabadell, who cannot be terribly pleased with the way their British acquisition has turned out so far.
She is also up against a fundamental change in customers’ behaviour, with people migrating en masse to banking and shopping online.
The branch closures at TSB are part of a wider story of life draining out of the High Street, which has been exacerbated by coronavirus.
To give an indication of how strong this trend has been, since the first lockdown the number signing up for online banking has risen from 1,200 to 4,000 a day.
It is not just youngsters – there has been a 50 per cent increase in those aged over 60. Of course, this defection is partly because of poor service in branches and limited opening in lockdown.
There are some factors specific to TSB motivating these closures.
When it was hived off from Lloyds, it did not inherit the nicest or best situated branches. Many are slightly off the main track and in old, dilapidated buildings, so there is less incentive to try to keep them open.
But it also reflects a wider shift in society. If widespread working from home becomes permanently entrenched, we are likely to see even more bank branch closures in town and city centres, as well as boarded-up shops.
One number is telling: at the branches that are shutting down, the average number of regular customers was just 20 a week over the year to February – in other words, pre-lockdown.
At these levels, Crosbie may have felt there was no alternative, particularly as the bank swung into a Covid-linked loss of £65.5million.
She and other bank bosses face the prospect of negative interest rates, which would depress profits further and also create a massive distraction at a time when it is least welcome.
TSB is in a difficult situation and its Spanish top brass may not be overly sympathetic to the plight of British account-holders who want to carry on using their local branch. Once again customers are the ones who pay the price.
Board diversity
As Andy Haldane, the Bank of England’s chief economist, suggests, we need to avoid the economics of fear and embrace the positive.
One thing companies could do to boost their own fortunes and the economy as a whole is to help people reach their full potential, no matter what their age, gender, or ethnicity.
There have already been campaigns to get more women into top jobs, which have achieved partial success, though we are a long way short of equality.
Race is the next frontier. This is why the initiative by Lord Bilimoria, president of the CBI, to increase the participation of black, Asian and ethnic minorities on boards is welcome. As the founder of Cobra Beer, he is a great role model for what can be achieved, and he is not alone.
This week we have seen two examples of success from the Asian community: the Arora brothers, who have taken discounter B&M from a loss-making basket case to a phenomenon twice the market value of Marks & Spencer, and the Issas, who are in pole position to take over Asda.
In a post-Covid economy, we simply cannot afford to carry on squandering the talents of women and ethnic minorities.