Out-Law / Your Daily Need-To-Know

UK banks commit to working harder for vulnerable customers when closing branches

Out-Law News | 10 Nov 2016 | 5:18 pm | 2 min. read

The UK's high street banks have committed to doing more to assist elderly and vulnerable customers when they decide to close a branch, including by appointing specially-trained staff to help customers with alternative banking methods.

Industry body the British Bankers Association (BBA) will make changes to its branch closure protocol to reflect the findings of an independent 'one year on' review, undertaken by Scottish businessman Professor Russel Griggs. The changes will be made by the end of this year, to come into effect in 2017.

BBA chief executive Anthony Browne said that branch closures were often necessary "in the midst of a consumer-led digital revolution in the way we do our day-to-day banking". However, banks were "very aware no customer or business should be left behind", he said.

"That is why decisions to close branches are never taken lightly," he said.

"It's encouraging the review found banks have tried hard to use the protocol correctly and approach any closure with the right culture and the correct amount of 'robustness and rigour'. There is no doubt they will continue to do so. However, there is always room for improvement. In accepting Prof Griggs' recommendations, the sector has moved swiftly to agree to update the guidelines and in doing so offer even greater support and advice to customers," he said.

The current protocol came into force in May 2015, following negotiations between the BBA and the coalition government. It commits banks to ensuring continued provision of alternative ways to bank before they can close a branch, as well as carrying out pre-closure assessments and an impact assessment. They must also involve the local community in the process following the announcement, before any closures are carried out.

Signatories of the protocol include the UK's largest banks and building society: Barclays, Clydesdale Bank, Co-op Bank, HSBC, Lloyds, Nationwide, RBS, Santander and TSB.

The agreement also committed the industry to review the protocol after a year, and the BBA appointed Griggs to do so in May this year. Griggs previously conducted an independent review of the Lending Code, and also acted as the independent external reviewer of the UK banks' SME Appeals Process.

Since the protocol was put in place a further 600 local bank branches have closed, and Griggs examined a random sample of 120 of these in detail for the purposes of his review. He found that, in general, banks had "not just treated this as a 'tick box' exercise and have put a lot of thought, effort and emotion into trying to do this in the best way they thought they could".

However, Griggs found that the banks tended to do "what they thought their customers would want" rather than "asking them what they needed"; and "did not engage with them as well as they could have". They also did not appear to understand that communicating with their customers about branch closures was "very different to what they usually convey to customers", according to the report.

The BBA has backed Griggs' recommendation that banks appoint specially-trained staff to provide customers with alternatives throughout the period between announcement and closure; and to have banks inform the local community of their decision to close a branch as soon as practically possible rather than limiting this to the 12-week period set out in the protocol. Banks will also work "more proactively" with elderly and vulnerable customers to understand their requirements, and to help them use alternative ways to bank.

Griggs will now work with the BBA to develop an updated protocol. This could incorporate some of his practical recommendations, which include the potential introduction of generic cash pick-up services for small businesses affected by branch closures; and encouraging banks in Northern Ireland to formally adopt the protocol and be judged on it like any bank with a retail presence elsewhere in the UK.