What will new Post Office deal mean for UK banking?

Recently, retail banks in the UK came to a deal with the Post Office that will see a range of counter services offered via Post Office branches. Described in some quarters as the biggest shake-up in face-to-face banking in a generation, it means 99 per cent of personal account holders and three-quarters of small businesses will be able to do their day-to-day banking at the Post Office.

In an environment where banks are under huge pressure to cut costs – which has led to many high street names looking to reduce their number of branches – this could be a clear indication that banks are recognizing the risks of removing a physical presence altogether.

While digital options such as online and mobile banking are a great convenient option for many people, others still much prefer the human interaction that only a branch can provide, but with many closures in recent years, this could leave some people – particularly in rural parts of the country – with few options.

Therefore, being able to carry out transactions at a Post Office counter ensures that consumers can maintain easy access to cash and other services that may otherwise have become available. This may benefit not only individuals and banks, but also the wider community.

Nick Kennett, chief executive of Post Office Financial Services, said: “When people can get cash locally, they spend it there too. Access to cash plays a vital role in many local communities, acting as the lifeblood to consumers and small businesses.”

Although it may be the case that people will still need to head to a full branch in order to complete more complex transactions, being able to visit a Post Office could be good news for many people, as the company noted 99.7 per cent of Brits live within three miles of a branch.

The move was also welcomed by the British Banking Association, with chief executive Anthony Browne noting that digital services aren’t for everyone.

“Some people still want that personal contact, which is why this arrangement with the Post Office is such good news,” he said. “It ensures customers can continue to access face-to-face banking and that no-one gets left behind by the technological revolution sweeping the industry.”

Written by Jack Dougal

Jack Dougal

Jack Dougal is Banking.com's resident news reporter. He writes regular blogs covering the latest stories and key developments in the global financial services industry.

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