Banks and the high street

As our banking behaviour heads online, major job losses will follow

So when was the last time you visited a bank branch? Now, be honest. The chances are that you are popping into your bank branch a lot less frequently than, say, three years ago, let alone 10 years ago.

Need to check your balance? Easy: go online. Pay a bill: ditto. Transfer cash between accounts, set up a direct debit - the answer is the same.

For many customers, the majority of everyday banking transactions can be conducted online or with a call centre or increasingly via smartphones and tablet devices such as the iPad.

This change in consumer behaviour is not yet apparent on the majority of UK High Streets but give it time.

Bank branch closures have been galloping along at a fair rate of knots in the past decade but until now have largely focused on small towns and rural communities.

Almost one-in-five UK bank branches have closed since 2000 with Barclays’ branch network for example down from 2,129 to 1,700; HSBC is down from 1,670 to 1,300 during the same period.

In the next decade, the High Streets of our larger towns will witness a major change in the number of bank branches and in branch design.

A relatively small number of flagship bank branches, vaguely along the lines of Apple Stores, will spring up in the larger cities.

But for the vast majority of us, the typical bank branch will be much smaller in scale, largely self-service with all cash held in ATMs as banks cotton on to a greater use of self-service terminals.

From a design standpoint, the branch will become more like a retail store.

Have you been in a newish branch of HSBC or Barclays recently-you get the picture?

Major job losses to come

Since the banking crisis really gathered pace post Lehman in 2008, job losses have tended to focus in the back office; investment banking roles have also been scaled back.

Staff performing IT and other support roles have been particularly badly hit in the past three years or so at the high street lenders.

Last year alone, HSBC announced plans to axe 30,000 positions around the world.

Lloyds said that it would eliminate 16,800 positions, about 1 in 6 of its total workforce.

Elsewhere, Barclays is dispensing with 3,000 roles and counting and it is the same story at major banks across Europe.

Last year, banking job cuts across Europe topped 70,000.

But job losses at the High street branch level have barely started.

Take RBS. It is one of the most enthusiastic cost cutters in the High Street – all of course part of its masterplan to “rebuild the bank”.

Last year, it managed to lose a mere 500 branch staff, reducing retail banking total employment from 28,200 to 27,700.

There is far worse to come.

If the bank branch is to prosper, the customer experience will have to change.

Virgin Money’s lounge vision, providing a comfortable space for customers to have a coffee, relax, check emails or charge mobile phones, demonstrates how a banking brand can attempt to restore trust, deliver something different and attract customers.

Another high street strategy entirely is being pursued Lloyds TSB, where a new branch design is designed to enhance the role of the bank within the local community.

In a number of its markets – but not yet in the UK - Santander has rolled out Santander Select outlets, upmarket branches providing a level of comfort not normally associated with a humble bank branch.

Nationwide Building Society is also investing with plans to refurbish its entire retail network of 700 outlets over the next two years.

That is about it for good news.

 

Douglas Blakey is the editor of Retail Banker International

Getty
Show Hide image

There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.