EXCLUSIVE: “Face The Truth” – Ron Delnevo in ‘The Fintech Magazine’

Restoring in-branch banking to thousands of UK communities is not just possible – it’s happening, with or without the banks, says Ron Delnevo

Among the speakers at a financial services event I chaired earlier this year was a senior member of staff from a major UK bank. During his presentation, he remarked that nostalgia should be avoided in financial services.

A few months later, I attended the brilliant play Make It Happen, which fully exposed the disastrous reign at Royal Bank of Scotland of CEO Fred ‘the Shred’ Goodwin. It only took Goodwin 10 years to destroy a bank that had been part of the fabric of Scotland since 1727. He is also credited by some as having played a significant role in the world banking collapse of 2008.

The audience was on its feet at the end of the play, roaring, as Goodwin was deposed from his throne at the Palace of Gogarburn, the bank’s global headquarters. How fitting that Gogarburn was built on the former site of a hospital for the mentally unwell. Talking to people after the show, what came across was how the Scots in the audience wanted their bank back – as it was before Goodwin and his dismal top management team destroyed it.

That experience confirmed to me that there is absolutely nothing wrong with nostalgia, when it simply reflects the public wanting something that has been stolen from them returned. UK branch banking has largely been ‘stolen’ from the British public, particularly in the last decade. Once upon a time – actually, as recently as the 1980s – there was only one kind of UK banking and that was face-to-face in every community.

In 1950, there were 10,000 bank and building society branches for 50.4 million people. At their peak, in 1986, there were 21,643 branches, covering a population of 56.7 million. In 36 years, the population of the UK increased by 12.5 per cent, whilst the number of branches exploded by 116 per cent.

Why? Partly because, in the 1950s, the vast majority of UK workers were paid weekly in cash, which meant they rarely went to bank branches.

However, from 1960, wages began to be paid directly into bank accounts. Workers were forced to go to branches to get their cash, and those deposits also facilitated a massive increase in bank lending, encouraged by the end of rationing in 1954 and a marked increase in advertising, including via the newly-created ITV.

Wages did not increase significantly to fund this demand, but debt did. Two of the biggest areas of credit were for cars and housing. And how were the finances of such purchases – and many others – negotiated? Mostly via face-to-face visits to bank or building society branches.

Whether it was to open an account, withdraw or deposit cash, obtain a personal loan, negotiate a mortgage, or make any banking arrangement for a business startup, in the 1980s, a visit to the bank or building society was both necessary and expected. A branch manager was a local person of stature and authority, with a significant discretion to take decisions to assist people and businesses in the local community. So what happened to face-to-face banking?

A good place to start is the 1986 Building Societies Act, which provided an easy route for demutualisation. In 1986, there were 161 building societies in the UK, with more than 6,500 branches. Today, there are 42 building societies, with around 1,300 branches. Every building society that demutualised has GONE, except when retained as a brand by one of the Big Five UK banks. This decimation was definitely NOT implemented to satisfy the wishes of the British public.

How do I know? Because in 2025, there are 26 million building society members, more than at any time in the 250-year history of the UK mutual movement. And both they and the societies that serve them, value face-to-face contact. The growth of the UK’s biggest building society – Nationwide – illustrates what can be achieved by a financial services organisation that genuinely gives the British public what they want.

Nationwide had seven million members in 1986. Having avoided demutualisation by a few thousand votes in 1997, it had more than 16 million members by 2025. With Nationwide’s acquisition of Virgin Money in 2024, it increased its total customers to around 24 million. Within two years, based on current growth, Nationwide will become the biggest building society and bank in the UK, measured by customer numbers, overtaking the likes of Barclays, HSBC and Lloyds Bank Group.

Nationwide has committed to keeping all of its more than 600 branches open until at least 2028, providing community financial services countrywide. A mutual, with a stable branch network, delivering what its customers want. The UK banks have been trying since 1986 to get rid of face-to-face banking – not to give customers what they want, but to earn even fatter profits by diminishing service standards. It was in 1997 that Royal Bank of Scotland (RBS) became the first UK bank to launch internet banking services. In 1997, RBS had more than 600 UK branches and added a further 600 in 2000, when it acquired NatWest Bank.

Out of that 1,200 total, fewer than 500 will remain by the end of this year. In 1997, Nationwide became the first building society to launch internet banking services. In 1997, it had 150 branches. Today it has more than 600. Is any more proof required that the launch of internet banking was not the driving force behind branch closures?

Nationwide is giving its customers what they want, which is the choice of using both branches and the internet. The UK banks have suited themselves. Period.

There has been numerous research done by the likes of Accenture, Deloitte and PwC, which show that many financial services customers still want face-to-face contact, especially for more complex transactions. A User Testing survey in 2023 found that 83 per cent of respondents preferred traditional banks, largely due to a preference for speaking face-to-face. So how can their wishes be met?

Certainly not by urging the Big Five UK banks to keep branches open, because that’s been going on for at least two decades. Their strategy for what remains of the branch network is to serve only those communities with more than 60,000 residents. But I think there are several reasons to be optimistic that face-to-face banking will be restored more broadly.

Firstly, the UK Government is currently engaged in a public consultation on the future of the Post Office, which, despite losses over recent years, still has more than 11,500 branches across the country. Perhaps one result of the consultation could be to revive the 2020 Labour manifesto pledge to launch a 3,000-branch Post Office bank, offering a more comprehensive range of financial services than the Post Office currently offers, including current accounts.

“Nationwide is giving its customers what they want, which is the choice of using both branches and the internet”

At the very least, most commentators agree that the Post Office branch network must be safeguarded to meet, at a minimum, the basic financial needs of the public and businesses in thousands of communities around the UK that don’t have a bank.

Then there are banking hubs. These are meant to stabilise community financial services provision where the last bank branch has been closed.

However, though the UK has lost around two bank branches every day since 2017 – around 7,000 closures – so far, only 350 banking hubs have been promised by 2029. Harriett Baldwin, the Conservative MP for West Worcestershire, in a debate on bank branch closures held in the House of Commons in June 2025, called for a banking hub to be provided in every community that loses its last bank branch. And, according to a YouGov survey, 98 per cent of MPs agree with her. It would mean providing between 1,200 and 1,500 hubs, mostly covering communities with fewer than 50,000 residents.

The UK Government response to this is still awaited.

The expansion of the building society branch network continues to provide reason for hope, too. And these new branches are increasingly using innovations, including opportunities provided by open banking, to deliver even better services. And, finally, there are new organisations, which are planning to repopulate many high streets with their own branches that go beyond single brand services. It seems likely that these market entrants will concentrate on communities of between 40,000 and 60,000 residents, and offer more comprehensive access to financial services than banking hubs or Post Offices.

One example of these new entrants is banxlocal, due to open its first branches in the latter part of 2025. Its mission is to become the next new ‘bank’ on the high street, but as a non-bank player. There are more than 1,500 financial services providers registered with the Prudential Regulation Authority (PRA). Banxlocal plans to provide many of them with a high street presence, giving the public access to multiple banks and services in a single shared location and allowing them to seamlessly switch from branch services to digital and digital to branch services, under one roof. This will allow many of those providers to extend their reach and market share.

The banxlocal model is sustainable via a fair revenue share with PRA-registered partners, across multiple services and revenue streams, including retail savings, investments, lending and insurance. Its aim, ultimately, is to serve 400-plus UK communities and that will include cash services.

Kevin Smith, CEO and Founder of banxlocal, has spent around 30 years in UK retail banking.

“For the last 18 years, I’ve worked as an outsourced branch agent for a UK challenger bank,” he says. “That’s given me a unique insight into the demand for face-to-face branch services. And the narrative the Big Five banks have created to justify branch closures has painted a false picture. Tens of millions of British adults want branch access and definitely prefer to have their financial services needs met face-to-face.”

So, what do we conclude?

That, between a reimagined Post Office, expansion of building society branches, banking hubs, and innovators such as banxlocal, there are multiple opportunities to deliver the face-to-face community financial services that the British public wants. And do it profitably

This article was published in The Fintech Magazine Issue #36, Page 49-50