LONDON — A senior banker at High Street lender Natwest believes roving bankers responsible for postcodes rather than tied to branches could become more commonplace as banks reduce their presence in towns and cities across the country.
More than 1,000 bank branches across the UK have closed in just the last two years, according to Which?, with HSBC closing more than any other. The bank recently announced it is closing a further 64 branches as part of a final round of cuts.
Marcelino Castrillo, the Managing Director of Business and Private Banking at Natwest, told Business Insider the industry trend is unlikely to reverse, saying: “The branch footprint, I see that continuing to decrease.”
But he added: “Now what I see is having people on the ground who aren’t necessarily allocated to a branch. For instance in business banking last year we launched a role called business growth enablers, which is 73 people now across the UK. Each of them own their local market and their role is to connect all those small businesses with themselves, provide the right advice to startups.”
Castrillo added: “Those people are not allocated to a branch. They own certain postcodes, but they are not sitting in a branch. That will continue to be the case going forward. We will continue to have people on the ground but the place in which people transact, we might have less of those.”
Natwest is owned by Royal Bank of Scotland and the two banks announced plans to close 32 branches between them last April.
Castrillo said: “From a professional perspective, the facts are that less and less people use branches to bank. In many cases, there really isn’t demand to have that real estate to do those transactions.”
Castrlillo says digital service can increasingly meet people’s needs, thanks to a boom in mobile adoption among customers and an explosion of “fintech” — financial technology — startup who are willing and able to partner with big banks.
He says: “In terms of finch, the system has become quite rich over the last few years with a lot of companies offering bank-like products or solutions. We’ve invested quite a lot in having a good mobile channel where most of the finch solutions will be delivered to our customers. We see a world that’s becoming increasingly mobile, not just digital. I think we were a little ahead of the game.
“For our perspective, regulation at some point will force banks to be integrated with other banks whether they like it or not but we’re taking a much more pro-active stance, in terms of seeing the opportunity to partner up with some of these finch startups that are adjacent and complementary to banking, and trying to look at ways we can integrate them.”
He highlighted a partnership with FreeAgent, which makes accounting software for sole traders and small businesses, and an investment in Nift, a startup that helps people understand contract “jargon.”
Castrillo says: “We’re not trying to re-invent the wheel. Some of the technology out there right now, especially around APIs, makes it relatively — I wouldn’t say simple — but it can make us relatively more agile.”
He added: “But I don’t think this is about buying companies anymore. In the old days banks had a tendency to buy companies and take them off the market. Now, in such a dynamic environment, this could be the best solution today but in three years god knows. You need to give yourself the flexibility to adapt.”
The British banking market has seen a slew of new mobile-only entrants to the market in the last 18 months, unencumbered by costly branch networks. Startup digital-only banks include Atom, Monzo, Starling, and Tandem.
Castrillo says: ” If I were to start a bank now, that’s exactly what I do. There is a segment of the market that want to interact with you that way. I think it’s relatively small demand today but actually, these banks have relatively small fixed costs.”
He added that while Natwest are investing heavily in their mobile app: “We won’t be a mobile-only bank anytime soon.”