Branch and ATM closures or conversions; good practice and areas for improvement

When a firm considers closing a branch fully or partially, or converting an ATM, it should consider the suitability of alternative services to their customers, including SME, micro-businesses and personal customers. 

When analysing alternative services, firms should consider:

• the needs of customers currently using the sites (including the needs of relevant SMEs or micro-businesses and customers in vulnerable circumstances)
• the likely impact of the closure or conversion, and alternatives that are or could reasonably be put in place to continue to meet those customers’ needs 

Good practice from firms that met our expectations

• Firms considered the impact of proposed closures on all customers, including SMEs and micro-enterprises.
• Relevant analysis included an on-site assessment of the local area covering, at least, internet access and disability access. 
• Firms ensured the remaining service is suitable and available for the customers wanting to use it. For example, current customers are able to access it on foot, or the location is suitable for those with mobility issues.
• Firms adjusted closure plans and proposals to introduce alternative services based on customer need and relevant feedback. 
• When looking at alternatives, firms considered a broad range of options, including free to use ATMs and cashback available in local shops as well as Post Offices.
• Firms considered the remaining capacity of existing local alternatives to serve customers of the closing site and incorporated this into their branch closure planning. This included queue length at key times of day and thoughtful commentary on ease of access and navigation around alternatives.
• Firms identified customers who did not currently bank digitally and mapped in-person transactions to evaluate other local facilities which might be useful for them.
• Firms planned ahead for the changes in traffic at the remaining locations. They increased capacity where necessary, before closing the relevant branches.
• Where additional features needed to be built into platforms to enable remote servicing post closure, firms commissioned these changes before closing branches. Where this was not possible – additional resource was given to helplines to assist with customer queries in the interim.
• If a longer-term replacement service was not in place before the branch closed, some form of local engagement was established to support customers through the transition, in a suitable community space.

Examples of practices where we have wanted to see improvements

• Firms had not undertaken on-site assessment of alternative service sites or service delivery models, relying instead on remote research and analysis. So, they missed things that they would have picked up from visiting in person eg suitable footpaths and stepped access.
• Firm plans were not sufficiently altered to take into account consumer feedback on the impact of a closure.
• Firms suggested alternative arrangements that included their own branches where closures or reduced services were also planned.
• Firms focus their reviews on cash access and did not fully consider access to other services.
• Firms arranged events online to explain to customers how they could engage digitally, but didn’t check that customers had devices that would enable them to access such events.
• Firms did not effectively consider the impact on the remaining branches, resulting in unacceptable queue length and waiting times for appointments at remaining locations.
• Firms did not fully consider the cost to customers of using an alternative branch, such as cost of travel to alternatives.
• Firms only looked at the internet connection at the location of the branch that is closing, and not more widely at places where customers are more likely to use online banking, such as where they live.

Firms must ensure that they consider the information needs of their customers, and provide information in a way that is clear, fair, and not misleading.

Once a firm has completed its analysis, if it decides to then fully or partially close or convert a site, it should give customers and other relevant stakeholders information that enables them to understand important information such as when the closure is planned to take place and how they can continue to access banking services.

Good practice from firms that met our expectations

• Firms updated their detailed analyses for branch closures regularly. Summaries of such analyses were easily accessible for review both online and in branch by customers and other stakeholders prior to closure.
• Firms considered how to communicate with different groups by using local networks such as councils, charities, advice providers, and housing associations.
• Firms demonstrated that they had taken account of feedback following a closure announcement and, where appropriate, offered community meetings and other suitable outreach.
• Firms notified customers of closures using various communication channels. They considered what channels would be suitable for customers in vulnerable circumstances, eg they wrote to customers who may struggle to recall conversations.

Examples of practices where we have wanted to see improvements

• Firms did not follow up with a range of communication channels to meet the needs of their customers or used them at very short notice eg branch closure notice days prior to branch closure.
• Firms did not implement a range of communications to ensure that they met the needs of consumers known to have characteristics of vulnerability. For example, they relied on outbound call campaigns to reach consumers whose circumstances mean they may struggle to deal with phone calls or to recall conversations not followed up in writing.
• Firms did not consider how customers whose accounts were not supported by an ATM or debit card (such as a passbook account) could access their accounts.

Customers in vulnerable circumstances may be particularly at risk of harm from closures. For example, a person with a disability may struggle to travel further to an alternative site. Someone with low financial or digital capability may find it difficult to use online or telephone banking.

Firms should also take into account that some services provided to customers in vulnerable situations are likely to be provided by face-to-face meetings in a branch. For example, proving identity, help with opening or closing an account, or dealing with issues involving Power of Attorney or bereavement. 

We recognise however there is not a direct correlation between vulnerability and a need for branch or ATM access, and that for some customers in vulnerable circumstances alternative channels may be more appropriate. 

In February 2021 we published Guidance for firms on the fair treatment of vulnerable customers[2] which explains firms should take the needs of customers in vulnerable circumstances into account at all stages of their communications, product and service design cycles. This includes if they are closing a communication channel, branch, or reducing services from a particular channel. Firms should ensure that the method of engaging with customers in vulnerable circumstances is sensitive to the needs of the customer, and, where appropriate, their carer.

Good practice from firms that met our expectations

• When considering branch closures, firms reviewed the variety of public transport around the alternative branch location eg bus timetables, disabled access.
• They used customer data to identify individual or cohorts of customers that may be more at risk of harm due to personal circumstances and appropriately tailored their communications to these individuals and groups. For example, for certain cohorts of customers the firm decided that to ensure their needs were met in full it would be appropriate to have a contact strategy that involved phone calls as well as written communications.
• Firms implemented appropriate processes to identify where they had not met the needs of consumers in vulnerable circumstances and made improvements.  
• Firms ensured that frontline staff had the necessary skills and capability to recognise and respond to a range of characteristics of vulnerability.  
• They ensured relevant staff understood how their role affects the fair treatment of consumers in vulnerable circumstances.  
• Firms offered practical and emotional support to frontline staff dealing with consumers in vulnerable circumstances.
• Firms produced and regularly reviewed management information, including on the outcomes that they are delivering for consumers in vulnerable circumstances.
• Firms identified that some closing branches had higher numbers of customers in vulnerable circumstances and so planned for a longer period between announcement and closure to better support customers with the changes. 
• Firms offered and publicised free cash delivery facilities for customers who were unable to get to a branch.

Examples of practices where we have wanted to see improvements

• Firms considered only consolidated plans and did not take into account the unique aspects of the customer profile at the closing branch. Customer contact strategies and stakeholder engagement were designed in a template that was not tailored to the local needs. This also resulted in a failure to swiftly incorporate lessons learned from previous closures.
• Firms did not have sufficient data to determine which consumers may require additional support due to vulnerable circumstances. So, they couldn’t work out how the proposed closure may affect them and identify any suitable alternatives.
• Branch closure plans did not consider details of the physical location of remaining branches, eg local geography and public transport.
• Plans submitted lacked clarity and were inconsistent, requiring further follow up to understand firm intentions and to enable the firm to demonstrate how they were delivering thoughtful support for customers in vulnerable circumstances.

We expect accountable Senior Manager(s) to engage to achieve good practice when overseeing branch closure initiatives.

Good practice from firms that met our expectations

• Firms proactively completed suitably detailed analysis for all branch closures. 
• Senior Managers asked for and received regular assurance via effective management information that branch closure plans were adhering to our principles. 
• Leadership took decisions with consumer feedback in mind, such as requiring firms to consider alternative sites from those proposed or by pausing branch closure initiatives while collecting further data where needed.

Examples of practices where we have wanted to see improvements

• Senior Managers did not receive regular management information pre-closure and lacked insight into branch closure proposals.
• Firms did not complete detailed analysis of the impact of a proposed closure or conversion on their customers for all branch closures.
• Firms did not give us a clear summary of that analysis.
• Firms did not engage in lessons learnt exercises post closure.
• Branch closure plans were not given sufficient scrutiny or importance at Senior Manager level.
• Firms’ analysis focussed on the objectives of the firm, but did not address the impact on customers and the time needed to transition existing customers to new engagement models and servicing channels. Senior managers should prevent these implementation issues from happening.