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16 April 2018

Mobile banking promise isn't first to be broken

RBS promised they wouldn’t close the last bank in town. RBS promised they would replace banks slated for closures with smart ATMs and regular mobile van banking services. RBS said they were changing.

So the news that rural communities are getting their mobile banking services cut shouldn’t surprise us.

Just over three months ago, RBS announced an additional 62 Scottish branches would close. They only agreed a reprieve for ten of them after campaigning by five political parties, two parliaments and great work from media like The Herald. Ullapool - Shore Street 1

At that time, RBS executives carefully explained that banking habits were changing, that footfall was down, and online was on the up. That cash was going the way of the dinosaur, and those that used paper money – maybe for a newspaper at the corner shop - were set for extinction.  

They painted those against these changes as old-fashioned. But it is RBS that is behind the times.

The facts are inconvenient for the taxpayer-backed institution. Two fifths of all UK transactions use cash. And while a majority of businesses use online banking, if a firm’s customer wants to pay in cash, the business needs to accept the money. Cash-based businesses, say hospitality firms located in our rural north, need somewhere to deposit their takings.

Online might be the future, but many of the areas where the bank is closing branches (and now cutting alternatives) have some of the poorest digital connectivity in the UK.

Banks could co-locate to reduce costs, or invest in mobile or broadband infrastructure to mitigate the impact of their closures. They could keep branches open to show they back local communities and high street Scotland.  

But at RBS HQ it certainly looks like these arguments are dead, and have been for some time. By the end of 2018, RBS will have reduced their Scottish branch network by 70% in 5 years.

All of this from an institution still reeling from official investigations looking at malpractice affecting many small business customers.

Their latest decision suggests the current plan is to slowly withdraw banking services over time, using tried and tested techniques like reducing service hours and then claiming that service-users are down.

RBS chief Ross McEwan will give evidence to MPs in less than a month. Earlier this year, his executives promised enhanced non-branch services for customers set to lose their bank. Our parliamentarians must ask whether this promise is going to be kept. If not, the UK Government in its role as primary shareholder must step in. 

 

Colin Borland is the Federation of Small Businesses’ (FSB) head of devolved nations

This article first appeared in The Herald 

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