Branching Out: Brits lead Europe & US in turning back on bank branches

By Gloria Methri

UK consumers are leading the way in abandoning traditional bank branches, with only 23% deeming it essential to have one nearby when choosing a financial provider. This trend stands in stark contrast to their counterparts in the US (38%) and Europe (35%), where a physical banking presence still holds more sway.

The findings—commissioned by CRIF for its latest Banking on Banks report—show that UK consumers are now the least likely to choose a bank or financial provider based on its physical presence near where they live.

A Generational Shift

Breaking it down by age, the report revealed that young adults in the UK aged 18 to 34 show the least attachment to brick-and-mortar banks, with just 13% valuing a nearby branch. This is a marked decrease from 21% last year, signalling a clear move toward digital banking as the norm. Even among older adults (55+), only 33% feel the need for a physical bank nearby, significantly lower than the 53% of older Americans who still prefer a local branch.

This change is likely fuelled by the surge in online banking, especially following the closure of over 6,000 branches in the UK since 2015. As many as 46 million adults now turn to their smartphones and computers for their banking needs, a testament to the convenience and accessibility of digital services.

What Really Matters to UK Consumers?

So, what do Brits prioritise when choosing a bank? The top factors include tailored products and services (41%) and a well-established brand (35%). Interestingly, UK consumers also value good customer reviews (28%) more than their European peers, indicating a desire for transparency and reliability in the digital banking landscape. Furthermore, 27% want the ability to manage all aspects of their banking online, a sentiment that resonates across all age groups, including those over 55 (26%).

Sara Costantini, Regional Director for the UK & Ireland at CRIF, said, “The way in which we manage our finances is changing, and nowhere is this clearer than in the UK. While in the US and Europe many people still value the importance of a local bank branch, Brits of all ages are placing less importance on this when choosing a bank. We know that the UK is the leader in financial services and communication technology in the European area. This, coupled with the ongoing closures of branches, has fuelled the embrace of digital banking. Yet this poses challenges for banks and other financial providers, who must not only adapt to meet growing digital demands but do so in a way that meets high expectations for tailored services and products while maintaining more traditional services to support all existing clients.”

The new data forms part of CRIF’s 2024 Banking on Banks report series, with its most recent report looking at consumer trust around data and financial services. It builds on 2023’s report and research, which found many consumers across Europe had embraced digital banking as a means of better managing their finances during difficult economic times.