Royal Bank of Scotland branch closures Contents

5Alternative banking methods

61.Since they announced these closures RBS have emphasised the alternative ways that their customers can continue to bank with them. These methods include: online banking, using a mobile branch and the support offered by community bankers. In this chapter we consider the adequacy of these alternatives to in-branch banking.

Online banking

62.RBS has cited the increase in online banking as one of the main reasons behind the recent round of branch closures. The “help and support for personal and business customers” documents that RBS has published for each branch closure state:

More and more people are choosing to do their banking online, with our Mobile Banking app, or over the phone. It’s more convenient to do it at a time and place that suits you, rather than come into branch. This means some branches are being used a lot less than they used to be.

- Branch usage is down 40% since 2014

- 1.1 billion mobile and online transactions in first half of 2017—an increase of 41% since the second half of 2014

- Number of customers using our mobile app up by 43% since 2014

- Mobile transactions up by 73% since 201488

Ahead of the closures, RBS have said that all affected branches will have a “Digital TechXpert”; a member of staff who will provide practical help to customers wishing to set-up and use online banking. RBS told us that 7 of 10 of these customers used mobile banking89 but accepted that this did not mean that those customers were able to use mobile banking to meet all of their needs.90

63.RBS’s reliance on mobile banking as an alternative to in-branch services has been criticised on the basis that many of the areas affected have limited broadband coverage. According to an article in the Press and Journal, of the 18 branches facing closure in the north and north-east of Scotland, 12 are in areas in the bottom 20% of broadband coverage—of which five are in the worst 10%.91 Unite Scotland’s evidence refers to poor-WiFi coverage being an issue, particularly in the Borders and the Highlands and Islands, as well as to the “elderly or infirm” having more difficultly banking online.92 Which? note that almost 2 million adults in Scotland do not use online banking services “with bad broadband identified as a key reason.”93 Secretary of State for Scotland, David Mundell MP, has said it was “not good enough for RBS to say people can rely on internet and mobile banking when so many people in Scotland do not have access to the internet or mobile services”.94

64.The FSB has highlighted a lack of digital skills, particularly amongst older small business owners, as a key obstacle to businesses doing more banking transactions online, while some individuals who submitted their own accounts of the impact of closures expressed concerns that using online banking could leave them vulnerable to online fraud. Emma Cooper from Scottish Rural Action, noted that the “UK Government’s digital inclusion strategy states that 10% of people because of literacy or disability issues, may never be expected to be able to use online banks.”95

65.We asked RBS if they had looked at the broadband and mobile coverage in towns where their branch is being closed, including the wider catchment area. In response, Les Matheson told us:

We are assuming there will be a proportion of customers who will not be able to access Wi-Fi or broadband and so we are providing services to make sure that if people have not made that switch that they will have access to, particularly, paying in and taking out money96

However when we asked RBS if they had done any analysis looking at whether customers in the banks’ catchment areas had access to broadband we did not get a satisfactory answer, with Jane Howard’s reply focusing on the fact that RBS has invested in providing wifi in branches themselves, saying that customers were welcome to use their own mobile devise in those branches.97

66.Online banking has changed the way that many people bank, providing an easier and quicker way for customers to perform some everyday banking services. We welcome the efforts that RBS is making to help customers develop the digital skills they need to confidently and safely bank online. However, we are disappointed that RBS does not appear to have analysed the availability of decent quality broadband in the catchment areas of the banks they are planning to close.

Targets for transferring customer to online services

67.Ahead of our second evidence session with RBS, a number of Members received information that RBS was setting its staff targets for moving customers to online methods of banking, which could serve to reduce footfall to branches, making them less sustainable. During the evidence session the Chair asked Ross McEwan whether it was “the case that staff have been set targets in these branches in order to secure these digital customers”, to which Mr McEwan replied:

No, it is not right. Can I just say what we do have? Some years ago we removed all incentives out of our branch network. I think we were one of the first banks to do that. We took all incentives out. What we have been asking our colleagues to do is talk to customers about other ways of banking.

Later in the session Hugh Gaffney MP asked what performance targets had been set for bank branch staff in relation to online banking. In response Jane Howard, Managing Director of Personal Banking said “We talked about this earlier when we said we do not have targets and we removed incentives. I expect our colleagues in the branches to talk to customers about all the ways to bank, and that includes digital.”98

68.Following this evidence session, it was reported in the Daily Record that RBS does set targets for its employees on switching customers to online services. This article featured a screenshot of a document appearing to show these targets.99 We wrote to RBS to ask them to clarify their evidence. In response RBS told us that:

RBS continued that “as a bank we have removed targets and frontline incentives for our colleagues - this was an important step in changing the culture […] and moving away from the mistakes of the past.” They continued that “targets are very specifically defined in our organisation” and that “colleagues have goals to serve our customers well and […] we asked them to do a number of things in order to meet this aim.” They said that the document featured in the Daily Record article was “a standard performance document” in which staff are “expected to agree objectives with their line managers […] as well as ways of measuring against these goals.101

Mobile branches

69.Mobile branches are vans which travel between different rural communities to offer banking services. This is offered in 21 areas and provides the following services:

a)Cashing cheques

b)Making account deposits

c)Paying bills

d)General account and product enquiries

RBS’s website states that: “Our Mobile Branch staff are happy to help Customers contact main areas of the bank so that they can make enquiries or get quotes for all of Royal Bank of Scotland major products, such as loans, credit cards and insurance.”

70.Unite has criticised the reliance on mobile branches as an alternative to traditional branches saying there is “considerable evidence of complaints about the quality of these current services”102 with Lyn Turner noting that poor weather in the Highlands, particularly during winter, made these services unreliable.103 Emma Cooper told us that individuals with mobility issues could have difficulty using mobile branches;104 said that it was unclear whether areas affected by closures would be covered by mobile branches,105 and noted that mobile branches had limited opening hours.106 Mobile branch stops range between 5 minutes and 2 hours, with stops of 15 to 60 minutes the most frequent.107

71.The FSB reported that their members “frequently cite security issues” with mobile branches and that one member was robbed outside their business while waiting for a mobile banking unit. They were also critical of the poor attempts made by RBS and others to raise awareness of mobile banking units and their routes.108

72.Jane Howard, Managing Director of Personal Banking at RBS told us that mobile banks “will be reaching 440 communities every week”,109 and that since the announcement RBS had been working with some local councillors to identify the best places for the mobile vans to stop.110 She also said that where communities had been shown the mobile van the reaction had been positive, and that RBS was planning on demonstrating the vans to more affected communities.111 Les Matheson said that mobile vans “in particular” would help provide banking services in areas with no or poor broadband coverage.112

73.In April RBS was criticised for announcing revised mobile banking timetables that reduced the time that the mobile bank stopped in some towns, with some stops being removed entirely.113 Colin Borland, FSB’s head of devolved nations, was highly critical of this move saying:

“RBS made the argument that the impact of Scottish branch closures would be mitigated by smart ATMs and mobile van bank services. Today’s reports warn that, because more branches are closing, these mobile van services will be spread even more thinly—making it harder for local businesses and consumers to access banking services.

“RBS looks again like it is trying to cut services that customers find valuable. This move also seems to clash with evidence RBS chiefs gave to MPs in January, where they talked up investment in their mobile bank fleet.”

Members of the Committee also have direct knowledge of communities that will be losing their mobile branch service as a result of these changes.114

74.When these points were put to RBS, Les Matheson told us that RBS had “ added more stops than we have taken away” and that where stops had been withdrawn it was because “they are not being used.”115 We were also told that the number and length of stops is constantly monitored,116 and that it had four backup vans that could be used to provide extra capacity if needed.117

75.While we welcome RBS’s attempts to mitigate some of the impacts of branch closures through alternative provisions, such as mobile banking vans, we have heard that mobile banking is in no way a replacement for traditional in-branch banking services. There are particular concerns about the availability and quality of mobile banking vans. RBS must properly engage with the views expressed by affected communities, and further expand its fleet of mobile branches if this is required to meet its customers’ needs.

Community bankers

76.Community bankers are members of RBS staff who are based in local communities to provide non-cash banking services. RBS has said that this will include “supporting financial planning, education and goals”,118 as well as providing individuals with advice and support banking in other ways, such as using post office banking services.119 In their written evidence RBS described community bankers as:

much like an old-fashioned manager and replicate many of the services available in our branches. For example, a typical day may include a community fraud event with a local luncheon club or a school financial education event, followed by individual customer appointments at the local community centre and a home visit to a more isolated or vulnerable customer.120

77.Lyn Turner from Unite Scotland, told us that the plans for community bankers were insufficient saying that his understanding was “there would be seven community bankers in the whole of Scotland, two of which would be in the Highlands. That is two covering the land mass of Belgium.”121 Les Matheson told us that in response to feedback the number of community bankers had been increased to 21.122

78.We welcome the introduction of community bankers by RBS, but believe that their current plans will fall far short of meeting customer needs. 21 individuals cannot cover the geographic area previously served by 62 physical branches, especially given their proposed role in providing home visits to vulnerable customers, which will be a resource intensive task. RBS need to radically increase the number of community bankers, otherwise these plans risk looking like a tokenistic attempt to deal with customers concerns.

88 RBS, Help and support for personal and business customers: Aberdeen, Bridge of Don branch closure Accessed 22 May 2018 (Same text in all branch closure documents)

91 Press and Journal, Threatened banks are in worst broadband areas, 5 December 2017

92 Unite Scotland (RBS0014)

93 Which? (RBS0016)

94 HC Dec, 6 December 2017, Col 1014

95 Q3

102 Unite Scotland (RBS0014)

107 Based on analysis of 8 mobile branch timetables from

108 Federation of Small Businesses (RBS0018)

113 Press and Journal, North community leaders angered by cuts to mobile bank van services, April 11 2018 plus John’s question.

118 RBS (RBS0024)

120 RBS (RBS0024)

Published: 27 May 2018