The coronavirus pandemic has dramatically impacted the world of banking and finance, among many other institutions. One facet of the financial sector is branch banking, where we’ve seen a trend of fewer bank transactions in most branches in the UK in recent months. This trend has been all the more apparent with the disruption brought about by COVID-19.
Here’s how COVID-19 has been impacting the branch banking sector:
Closure or shortened operating hours
Financial institutions are regarded as vital services, even amidst the pandemic. Even so, some branches of banks in the UK have to take a brief hiatus, while a few main banks remain operational to cater to the financial needs of people and businesses. Still, these branches had to reduce their operating hours and limit visits via scheduling appointments.
Shift to online banking
In consonance with such restrictions in the banking and finance industry, businesses and individuals are encouraged to do online banking. Online banking is much preferred over branch banking now more than ever. The COVID-19 crisis has even led to a sudden shift to digital banking due to contactless banking transactions. It is expected that online banking will continue to rise in the years to come.
A decrease in ATM withdrawals
As the government imposed lockdowns all over the country, there have been fewer cash withdrawals in ATMs. Most people stay at home and use online banking when paying for their basic needs. Even after the pandemic, banks could expect people to use less cash in making their purchases.
Contactless payment transactions
One of the measures to mitigate the coronavirus spread is social distancing. This practice has led to more contactless payment transactions, and customers plan to continue doing so in the future.
Increase in e-commerce popularity
As people have to stay at home, e-commerce has become even more popular. Instead of going out to do grocery shopping, many people opted to buy their needs through online platforms. Customers are likely to continue shopping online even after the COVID-19 crisis.
Retail business closures
Various businesses have closed their brick-and-mortar stores due to the coronavirus pandemic. Some stores in the UK have decided not to reopen even after the COVID-19 crisis, and it could be a trend that other business in some sectors might follow.
There’s no denying that the COVID-19 outbreak has drastically impacted the banking and finance sector. The above consumer behaviours have been observed since the onset of COVID-19, and they are expected to continue to impact branch banking in the near future.
Given all these, we can expect a decline in the UK branch banking in the years to come. Still, the traditional branch networks may dwindle but won’t completely disappear due to its established role in the finance industry. What we can expect are robust changes in finance and banking because as they say, change is constant and inevitable. People learn to adapt, depending on the situation, and we can hope that future changes in branch banking are all for the better.
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