What should the bank branch of the future look like?

Despite mass closures, bank branches still exist and increasingly offer extra services, longer opening hours and even drive-throughs. Unfortunately, not everyone will benefit.

When you read about bank branches, it’s invariably bad news.

Yet not all bank branches have closed – over 9,690 when they were last counted in 2017, with two in five people regularly using bank branches, according to the Financial Conduct Authority.

Branches still play such an important role that challenger Metro Bank has built its brand on being physically present on the high street, planning to open 11 more branches this year.

Halifax and Lloyds recently revamped two flagship branches in London and Manchester, with ‘state of the art features’ for homebuying, travel money and even kids’ savings.

RBS and NatWest have experimented with mobile branches for remote rural communities.

Branches are changing – but are they becoming more useful? And what’s the point of a bank branch when you can bank on a smartphone?

LoveMONEY spoke to new and old banks to find out.

Compare the best current accounts on our comparison site.

The branch of the future

Walking into a Metro Bank branch is nothing like entering a traditional bank, says Iain Kirkpatrick, managing director of retail banking.

For a start, the layout’s different, with “no division between our cashiers and customers allowing for meaningful conversations, and greeters on the door to welcome and direct customers when they arrive.”

Dogs and babies are welcome, with treats for the former and changing facilities for the latter; Metro Bank’s Luton and Slough branches are even ‘drive-thru’.

Halifax and Lloyd’s branches on London’s Tottenham Court Road and Manchester’s Market Street are similarly informal and include cafes partially staffed by local homeless people training as baristas.

In remote areas of England and Scotland, RBS and NatWest customers are now served by specially adapted trucks, which go from town to town, stopping several times a day.

All quite different from the familiar cashier hidden behind bullet-proof glass.

On-the-spot services

Halifax and Lloyds’ new stores were designed with “helping families with the big moments in life – like buying and moving home and helping children get into the savings habit”, says Jakob Pfaudler, group director of community banking.

That includes mortgage experts, available without an appointment, a travel money bureau and a kids’ play area (pictured) for learning about money and depositing pocket money.

Pfaudler argues that with most banking being done online, people want face-to-face contact for bigger financial decisions and branches should reflect that.

Yet for many older and vulnerable people, branches are vital for everyday banking because they can’t or don’t want to use mobile or online banking.

In contrast to Halifax and Lloyds, the mobile branches provided by RBS and NatWest can handle basic cash deposits and bill payments, for other products they provide a phone to call head office.

Other consumers might want to use branches for tasks that can be accomplished online but are quicker in branch – or when IT services aren’t available, as happened recently to TSB.

While most banks (including mobile branches) still allow you to open accounts in-branch, Metro Bank says you can also get a new or replacement credit or debit card printed in its branches.

Read more on branches: three other ways to manage your money

Safe deposit boxes

Many new bank branches also include a surprisingly low-tech feature: the safe deposit box.

Once common, most of us now only see these boxes in heist movies or reports from the famous Hatton Garden burglary back in 2015.

Safe deposit boxes are coming back in fashion, however, featuring in every new Metro Bank branch, whilst the flagship Halifax and Lloyds branches both include safe deposit boxes.

Prices at Metro Bank, Lloyds and Halifax all start at £16.66 a month, although there are restrictions on what you can store; cash is prohibited, for example.

Opening hours and location

The Halifax and Lloyds flagships, as well as all Metro Bank branches, have another huge advantage over traditional bank branches: they’re open 8 am to 8 pm, seven days a week.

Metro Bank is also one of few banks to remain open on public holidays.

Opening hours are useful if you have a local branch, but it’s unclear whether longer hours will make much difference to rural and disadvantaged areas.

Halifax, Lloyds and RBS are all closing dozens of branches this year and innovative new branch models will come as cold comfort to affected customers.

Although Metro Bank is opening branches, these won’t necessarily go to the neighbourhoods that are lacking a branch – and all are currently in the south and East of England.

In many cases, Metro Bank branches will join other banks' branches on the high street; as managing director Kirkpatrick explains, “we look for the very best location for every new store we open – including areas with a high footfall and a prime position.”

Read our guide on what to do if your local branch faces closure.

Who should pay for branches?

As banks continually point our, branches are disproportionally expensive to run.

It’s no coincidence that many of the current accounts paying the highest interest, or charging low fees on foreign spending, are offered by banks with few or even no branches.

One exception is Nationwide, whose FlexDirect account pays an impressive 5% interest and links to a regular saving account also paying 5%.

The catch is that FlexDirect customers have less access to branches than those with a Basic Flex Account – a fact Nationwide is quite open about (read more here).

So rather than paying more for branches, you could be paid to avoid them.

Nationwide's approach is potentially more popular move than the approach taken by HSBC, which was widely criticised when it tried reserving entire branches for its Premier customers.

Until very recently, we took bank branches for granted, tolerating inconsistent service, long waits and crumbling facilities. In order to save branches, do we need to make them a luxury extra?

What do you think? What features and services would you like to see in bank branches? Please take our poll and include your views in the comment section.