Why Are Banks Closing Their Branches? The Case of Santander’s 2025 UK Branch Closures.
In 2025, Santander announced plans to close 100 branches across the UK, continuing the growing trend of banks shutting down physical locations. This decision comes amid the accelerated digital transformation of the banking sector, changing customer behaviors, and the wider impact of technological advancements.
With more customers turning to online banking and mobile apps for their financial needs, the necessity for physical bank branches has diminished. While this shift offers several benefits for banks, it raises significant concerns for customers who may rely on in-person services. So, why are banks closing their branches, and what should consumers do if they no longer have access to one?
The Rise of Digital Banking
The most obvious reason banks are closing their branches is the rapid rise of digital banking. According to a recent study, over 80% of adults in the UK now use online or mobile banking regularly, preferring the convenience of conducting financial transactions from their phones or computers. With this trend, banks have found that maintaining a physical presence in communities is no longer necessary to serve most customers.
Mobile banking apps and online services are easy to use, provide 24/7 access to accounts, and offer features like real-time transaction alerts, budgeting tools, and instant money transfers. As digital solutions improve and become more secure, customers find it increasingly convenient to manage their finances remotely, making traditional branches obsolete for many.
Changing Customer Preferences
Another factor contributing to the closure of bank branches is changing customer preferences. Younger generations, in particular, are less inclined to visit physical bank locations, having grown up with smartphones and internet connectivity. These consumers are accustomed to managing their finances with the click of a button and are less likely to see the value in visiting a bank branch for routine transactions.
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Older generations, however, have traditionally relied more on in-person banking services, particularly for more complex transactions. As this demographic becomes more familiar with online banking tools, however, there is a gradual shift toward digital platforms, even among seniors. The closure of physical bank branches, in many cases, reflects banks’ adaptation to evolving customer expectations and the increasing demand for mobile-first financial services.
Cost-Cutting Measures
Another driving force behind the closure of bank branches is cost-cutting. Operating physical locations can be expensive, especially when considering rent, utilities, and staff salaries. With fewer customers visiting branches, maintaining these facilities becomes less profitable. In response, many banks, including Santander, have decided that it’s more cost-effective to reduce their physical footprint and invest resources into improving their digital infrastructure.
By closing branches, banks can reallocate those resources into enhancing their online platforms, improving cybersecurity, and offering innovative financial products. Moreover, by shifting their focus to digital services, banks can streamline operations and reach a larger customer base with fewer overhead costs.
Impact of the Pandemic
The COVID-19 pandemic played a significant role in accelerating the transition toward online banking. During the lockdowns, customers who may have been hesitant to switch to digital banking were forced to do so out of necessity. The pandemic also pushed many banks to enhance their digital offerings, including the introduction of more user-friendly apps, online customer support, and virtual banking services.
As customers became more accustomed to managing their finances remotely, the need for physical branches diminished. Banks, in turn, began to reevaluate their branch networks, resulting in the permanent closure of many locations. The pandemic served as a catalyst for the growing trend of branch closures, and as consumer behavior continues to evolve, banks are likely to continue trimming their physical presence.
The Case of Santander’s UK Branch Closures in 2025
Santander’s decision to close 100 branches across the UK in 2025 highlights this broader trend in the banking industry. The bank explained that the closures are part of an effort to “adapt to changing customer behavior” and prioritize “digital-first services” while still ensuring that customers who prefer face-to-face interactions are not left behind.
RELATED: The Future of Finance Apps in Modern Banking.
Santander’s closures follow a wave of similar moves by other high street banks. The decision is driven by the same reasons mentioned earlier: a move to digital banking, the decline in branch foot traffic, and the rising costs of maintaining physical locations. Santander, which has been at the forefront of digital banking innovation, believes that closing underperforming branches will allow the bank to invest further in enhancing its mobile banking offerings and overall customer experience.
Credit: Clay Banks on Unsplash
What Should Consumers Do if They Don’t Have Access to a Physical Branch Anymore?
With more and more branches closing, it’s understandable that some customers may feel uncertain about how to manage their banking needs without access to physical locations. Here are several steps consumers can take to adjust to the shift and ensure they continue to have convenient access to banking services:
1. Embrace Online Banking and Mobile Apps
The first step is to become familiar with your bank’s online banking platform and mobile app. Most modern banks provide an array of services through these digital tools, including bill payments, transfers, balance checks, loan applications, and more. The apps are designed to be user-friendly, and many banks offer tutorial guides to help new users get started.
If you’re unfamiliar with digital banking, start with basic tasks like checking your account balance or transferring funds between accounts. Gradually expand your use of the app to include more complex features. Most banks also provide live chat or phone support for customers who need assistance with online services.
2. Use ATMs and Cash Machines
For customers who need to withdraw cash or perform basic banking tasks, ATMs remain an important option. Many ATMs are now equipped with features that allow for deposits, balance inquiries, and even the ability to pay bills. Though the number of ATMs may be declining, there are still plenty of locations in cities and towns, and banks often provide fee-free access to their own machines.
3. Contact Customer Support for Assistance
For customers who prefer to speak to a representative in person or by phone, most banks offer robust customer support. Banks have adapted to the growing demand for remote support and now offer virtual consultations, phone support, and video conferencing options. Customers can address issues such as disputes, account questions, or setting up new services through these channels.
Additionally, many banks now offer dedicated online chat services, allowing customers to ask questions and resolve problems without needing to visit a branch.
4. Look for Alternative Physical Locations
If you require in-person assistance but can’t visit a branch, many banks have partnered with retail networks or third-party financial services providers that can offer physical locations for some banking services. For example, some banks have worked with post offices to provide limited banking services like cash withdrawals and bill payments. While these alternatives may not provide the full range of services offered at a branch, they can help with essential tasks.
5. Consider Switching Banks
If your current bank has closed its branches, and you’re struggling to adjust to online banking, it may be worth considering switching to a bank that still offers in-person services at locations near you. Many banks are now expanding their branch networks in more rural areas, recognizing that some customers still rely heavily on physical locations. While this option may be less convenient than digital banking, it can offer peace of mind for those who need direct interaction with bank staff.
Conclusion
The closure of bank branches, like Santander’s decision to close 100 branches in 2025, reflects a wider shift toward digital banking that has been gaining momentum for years. With fewer people visiting physical branches and a growing reliance on mobile apps, banks have found it more cost-effective to reduce their physical footprint. However, this shift has left some consumers concerned about losing access to the personal banking services they’ve relied on.
As the banking sector continues to evolve, consumers must adapt by embracing online tools, using ATMs, and leveraging alternative physical locations for banking services. While this change may initially feel overwhelming, it’s important to remember that digital banking can offer convenience, security, and improved access to services, all from the palm of your hand.
