RBS Cuts 10 Percent Of Physical Branches In UK

The Royal Bank of Scotland has revealed that they will likely be closing about 10 percent of their branches in the UK, reports Herald Scotland.

Mobile banking has lead to a diminishing customer need for retail banking, as RBS reported that more than two million of their UK customers were completing banking transactions on mobile devices. The growth of mobile banking has been significant considering the customer base was at zero about 15 months ago.

RBS currently has about 300 branches in Scotland and 2,050 across the UK, including 316 branches the European Commission ordered to be sold.

Ross McEwan, CEO of RBS UK retail banking, said to Herald Scotland, “I think across the UK, we have probably still got too many branches.”

RBS plans to replace the 10 percent branch cut with new technology investments. The bank previously announced a three-year investment program that will cost around £700 million, and part of the plan includes installation of more cash points for customers in locations such as shopping centers and railway stations. The additional 500 machines will include automated tellers and cash-deposit points.

McEwan expects branch sizes will become smaller because fewer transactions are being done in person. He explained that it makes sense that communities were choosing mobile services over retail branches.

Mobile banking is unlimited access whereas, as McEwan commented, “a branch is open a few hours here and there.”

RBS also warned that retail banking staff would likely see further cutbacks in the future. Due to the stagnant economy, they were recently forced to decrease staff in operational and technology teams by about 5 percent.

After making cuts, RBS now employs about 38,000 individuals. Despite intentions to make further cuts, RBS has declined to comment on the estimation of future dismissals.

To read the full story at Herald Scotland click here.