Experts are urging the UK’s financial services regulator to stop further bank branch closures from the country’s “Big Four” firms.
Barclays, HSBC, Lloyds and NatWest are “abusing their dominant position” in the banking market, according to experts from Moneyfacts Group.
In its latest issue of “Interest”, the financial information company took aim at the lack of competition between the banks and the impact of branch closures on local communities.
The experts explained: “The Bank of England and FCA must make sure this never happens again. The Big Four banks must be stopped from abusing their dominant position in the future.
“They must restore competition between them - starting with stopping any more bank closures and then restoring branches in unbanked areas.
“That is the price they must expect to pay for being a quadropoly. The FCA under its Consumer Duty Rules, is now able to wield a fairly large stick and should do so.”
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The Big Four banks are under fire for their record of branch closures
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Since January 2015, around 5,970 bank and building society branches have closed down, according to Which?.
This is the equivalent of around 54 branch closures each month and is more than half the branches that were open at the beginning of 2015.
The banking group with the most closures is NatWest Group, including NatWest, Royal Bank of Scotland and Ulster Bank, with 1,360 branches shut down.
Coming up in second place is Lloyds Banking Group, which is made up of Lloyds Bank, Halifax and Bank of Scotland. The group has shut down 1,139 locations over the period.
Furthermore, Moneyfacts noted the Big Four control 85 per cent of UK business accounts and three-quarters of current accounts.
As well as this, the average savings rate offered by NatWest, Lloyds, HSBC and Barclays between 2008 and 2022 was just 1.52 per cent.
This is despite the average rate of inflation over that period was sitting at 2.71 per cent.
Across their combined total of 74 accounts, customers of the Big Four banks were seeing average returns of just 0.26 per cent on their deposits even though inflation at that time was 1.5 per cent.
Using Moneyfacts “Rules of Thumb”, saving rates should have been around 3.5 per cent which is ten times more than the banks were paying.
Moneyfacts added: “For too long these Big Four banks, between them, have paid their savers too little.
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Moneyfacts has taken aim over how the bank's decision to close branches has impacted banking services
PA[They’ve] charged their customers too much; closed branches; reduced services; mis-sold PPI; mis-sold interest rate swaps; de-banked customers; ruined local communities and damaged local businesses.
“It isn’t as if the banks themselves benefited.
“By closing branches, they have lost contact with their customers, particularly the local businesses who used to go to them as a matter of course when they wanted to borrow, expand, move or buy new equipment or invest money.”
