Growing demand for shared banking hubs as 39% of people can't manage accounts online

In a new report by Age UK, it has been highlighted that more and more people above 65 in the UK don't know how to handle their bank account online and rely on visiting bank branches. This comes at a time when an increasing number of banks in the UK are shutting down their branches and going digital.

According to the report, three out of four people above the age of 65 prefer to do at least one bank transaction at their branch and aren't comfortable going fully online.

To counter this, the report has highlighted a need for more Shared Banking Hubs as the demand for face-to-face banking facilities increases.

Why is this crucial?

The new Ipsos research by Age UK shows four out of 10 people aren't managing their accounts online. At 4.09 million people, that's 39 per cent of the population of the UK. Such a large number of people at financial risk isn't good for the country. Also, these people are at high risk of financial exclusion.

As reported by Which? magazine, since January 2015, 5,162 bank and building society branches have been closed creating banking deserts in certain pockets of the UK, with an estimated 206 bank branches will shut down by 2023 year-end. According to a Statista report, Barclays closed down most branches between 2019 and 2023, followed by TSB. Barclays has plans to close 41 more branches this year. Of all the banks closing down branches this year, HSBC currently ranks as the highest.

In such a scenario, Shared Banking Hubs are the need of the hour as a substantial population is struggling with banking activities. At present, this age group faces a hurdle in going to banks as their nearest bank branches are often far away with very few buses and public transport plying to them. Also, they are increasingly being informed via official letters that their bank branch has shut down and their nearest branch is to be found in so and so place.

The online banking disparity

To prepare the report, a survey was conducted which revealed 75 per cent of people in the above 65 age group do at least one in-person bank transaction at a building society branch, bank branch or post office. That accounts for 7.86 million people. The poll also revealed the banking habit of this age group with 31 per cent not comfortable with online banking. That accounts for 3.25 million people who don't prefer online transaction

The report further highlights the disparity in online banking, saying that we can't bank on it anymore. There are several factors like income, social grade, gender, age etc that affect online banking. The researchers found that above 85 females with a low income are most uncomfortable with online banking. A reported 31 per cent of these people fear being scammed, 28 per cent don't have the required IT skills and 28 per cent don't trust online banking services

Based on this report, it's suggested that physical banking services in Shared Banking Hubs are made a reality in places where there are little to no bank branches. The survey suggests 49 per cent of people above 65 age said they would be comfortable using Shared Banking Hubs. That's 5.14 million people wanting Shared Banking Hubs. Most of them want the hubs to have a high-street presence.

How do the banking hubs help?

In recent times, banking hubs are doing very well and have become popular amongst local communities.

Around 2.4 million people of the above 65 age group are reliant on cash and for them, these Shared Banking Hubs are a boon. Being on a limited income, they find cash a more trustworthy and reliable form of interaction.

With these hubs in place, people can deposit cash, withdraw money, apply for loans and do other banking activities face-to-face.

Although these Shared Banking Hubs aren't made a reality until there is only one bank branch left in the area, they are fast gaining momentum. According to a Cash Access UK report 47 such Shared Banking Hubs are available in the country.