UK banks have closed more than one in three branches since 2019. The Office for National Statistics reports the high-street network has shrunk from 10,410 sites to 6,870, with another 113 closures already scheduled by the end of November.
Banks argue this is simply following the customer. Between 2020 and 2024, the proportion of Britons using digital channels to access banking rose from 33% to 59%, while branch footfall fell steadily.
When Differentiation Happened in Branch
Traditionally, banks used their physical estates as a source of competitive edge. Branches were designed not just for transactions but for presence and prestige. A clear example is Lloyds’ decision to invest heavily in landmark city-centre branches during the 1990s. A customer walking into Lloyds on Cornhill in London would encounter marble floors, brass fittings, and private offices that projected stability and trust. The branch itself was part of the proposition – a visible sign of scale and solidity.
Digital Now Sets the Standard
That advantage has now shifted. As high-street footprints contract, the customer experience no longer hinges on the grandeur of a building but on the clarity, usability, and functionality of a mobile app. The competitive battleground has moved to digital, where journeys like payments, savings, and borrowing must be delivered with speed and simplicity. Providers who once differentiated on their physical network must now do so on UX, design consistency, and the ability to anticipate customer needs.
The Regulatory Lens
The pace of closures is also attracting regulatory attention. Concerns over “banking deserts” and cash access have led the FCA to push for shared banking hubs, with 350 promised by 2029 (though just 179 have opened so far). Nationwide has made its own pledge to keep all branches until at least 2028, but the overall trajectory is clear: fewer branches, more digital.
Why It Matters
With one UK branch now serving 10,000 people (compared with 4,900 in France and 2,500 in Spain and Portugal), the physical presence of banking is rapidly diminishing. For most customers, the first and often only experience of their bank will be a screen. That makes digital the single most important driver of satisfaction, retention, and differentiation.
At BehindLogin, we see this shift every day in our research. Where marble floors once set banks apart, now it is intuitive app flows, clear communication, and seamless journeys that win loyalty. Providers that fail to recognise this are not just cutting costs – they are cutting relevance.
