We need to make it harder for banks to abandon Wales’ rural towns

Llanberis high street. Picture by Hefin Owen (CC BY-SA 2.0)

Ben Lake, MP for Ceredigion

The west of Wales was home to some of the first banking networks, set up in the 18th century to facilitate the booming trade of sheep and cattle, and to allow Welsh drovers to safely deposit large sums of money on their way to and from London.

It is tragically ironic therefore, that we now face the situation wherein these very same rural communities could soon be deprived of any at all.

In recent years, towns across Ceredigion, and much of rural Wales, have suffered bank closure after bank closure, and the most recent round of announcements represent what seems to be a trend that is accelerating at an alarming rate.

It is devastating for any community to lose a bank, but to have no banks at all is simply disastrous for individuals and the local economy.

We find ourselves in the unsustainable situation whereby some customers in Ceredigion face round-trips of around 50 miles at best if they wish to visit the nearest branch of their bank, and this situation is by no means unique to the county.

Yes, the way in which people bank is changing, but the way in which it is changing differs across the UK and not everyone is changing the way in which they bank.

For many in rural Wales, new and alternative ways of accessing banking services are simply not possible due to a lack of broadband and, as a consequence, online banking for personal use, and card payments (let alone contactless payments) are a distant prospect for many.


Given that there is still a demand for banking services of some sort by rural communities, but the banks appear willing to abandon rural areas, we must consider a comprehensive recasting of our banking model.

It must be redeveloped in a way that ensures the needs of all communities and individuals are catered for – whether they live in rural or urban areas.

Access to banking services is crucial if we want our communities to flourish, and the rural economy to prosper, but Westminster is allowing commercial banks to use simplistic, blanket statistics for the whole of the UK to justify bank closures in the most rural communities.

These closures present a range of challenges to both personal and business banking; challenges that are magnified in rural areas.

The closure of one branch will often require transferring to another branch many miles away. This is a particular problem for older people, or those with poor mobility, and, again, living in rural communities, where transport links are few and far between, merely exacerbates the problem.

Bank branch closures also creates serious obstacles for businesses, and especially small, family-run businesses which still play such a vital role in rural towns and villages.

These owners are forced to close just so that they can travel to their nearest branch to cash their takings. It simply isn’t sustainable for small businesses to close for an afternoon or a day in order to travel to the nearest bank.


The best way to combat this would be to develop a publicly supported, community-based bank network, along the lines of the German community banking model.

This is what we should be aiming for, but in the interim, there are measures we can pursue to at least alleviate some of the pressures felt by those living in the rural communities facing the prospect of the loss of their banking services.

Ministers should arrange an urgent summit of all the major UK retail banks in order to discuss their future plans with regard to their branch networks.

For too long, the approach to branch closures has been reactive; waiting for decisions, and then allowing them to happen.

The Access to Banking Standard must be strengthened, and greater requirements and responsibility should be placed on banks to abide by the communities that have long supported them.

Banks should be encouraged to expend greater efforts to maintain an equivalent level of banking service in rural areas: why not pursue greater co-operation, perhaps establishing ‘banking hubs’ where existing high street banks can co-locate, rather than completely vacate, rural towns, for example?

We may need to look at competition law in order to ensure that there are no unnecessary hurdles for banks to co-locate, particularly in rural areas. If necessary, then why not do so?

Furthermore, there could be a requirement for banks to consider the provision of broadband in an area when contemplating closure, so that areas where online banking is simply not an option are not hit with the removal of physical banking.


Westminster has conceded that one way of addressing the situation could be to bolster the banking offer of the Post Office. Why not build a proper community bank on the existing infrastructure of the Post Office?

We desperately need to decide what services we cannot do without. Work needs to begin on defining, and then introducing a statutory minimum level of banking services for any community, so that our position is stronger in the future.

These are just some suggestions as to how we might begin to re-model retail banking in Wales; there will of course be other ideas.

What is important is that we start to re-develop the way in which banking works for every community now.

We haven’t got the time to wait, and there’s a lot to do if we are to prevent rural communities from being starved of such services announcement, by devastating announcement.

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  1. Cytuno 100%. Yr oedd gan Swyddfa’r Post ar un adeg fanc (Y Girobank) oedd yn ddefnyddiol dros ben. Gwerthwyd y bank i Alliance and Leicester BS os cofiaf yn iawn, a wedi hynny ail werthwyd y bank gan A & L i Fanc Santander. Y broblem ynglyn ag ail ddechrau banc tebyg yn Swyddfa’r Post yw fod hwnnw’n cau canghenau hefyd. Mae gwir angen ymyraeth gan y Llywodraeth i wella’r sefyllfa. Lwc dda i’r awdur yn ei ymdrechion.

  2. Gwylon Phillips

    A few years ago Santander closed its agency in Cardigan. It was profitable. It had 6,000 account holders. The agency could do nothing. Once the decision is made at HQ that’s it. Faithful account holders don’t count. Beth am sefydlu banc cyhoeddus, cenedlaethol yng Nghymru?

  3. Bendigo Bank in Australia has an interesting business model. It specialises in opening in communities that have lost their banks. Locals have to invest in the franchise and commit to banking with it. Seems to work.

  4. Benjiman L. Angwin

    Dwi’n cytuno gan fwyaf, ond mae angen fod yn ofalus am ymyrryd mewn sefydliadau ac eiddio preifat oherwydd gall hynny gyfynygu ar ryddid unigolion. Er hynny, mae’r broblem anferthol. Mae cael gwared ar ddeddfwriaeth er caniatau i fusnesau weithredu ar y cyd mewn ardaloedd gwledig yn syniad hynod ryddfrydol, blaengar, optimistaidd a da.

  5. Perhaps discussions need to be started with Dave Fishwick (of ‘Bank on Dave’ fame)? http://www.thisismoney.co.uk/money/news/article-4323556/Bank-Dave-reveals-s-close-banking-licence.html

  6. Some tangible ideas here.Notably having a good look at the Post Office as a vehicle to deliver financial services physically as well any existing potential holds over banks.I am always concerned how little used existing devolved powers,notably planning, have been to tackle such challenges(or pub closures)and never a better time to move away from English planning precedent and do something innovative?
    I would be surprised if Welsh based institutions Eg Principality BS didn’t have quite a bit to say on what might be done in terms of regulation and incentives to operate at branch level and take Welsh savings for useful outcomes.Interesting to see how popular lending (through loanstock or bonds)has been at 4CG in Cardigan when tangible assets can be bought for local control,and how relatively low risk this can be.Consulting with Triodos Bank would also be well worth the time,they seem to have solid tec,are relatively incorruptible(Steiner controlled)and are entirely up with the issues.
    Assuming a Rhodri Morgan can’t be summoned up this might be one for the Welsh Civil Service to earn it’s spurs on, supported by all parties?

  7. jim humphreys

    A very interesting post by Simon on Leanne Woods article should be read by all nationalists.
    One of the best I have seen. Hope all you money guys roll your sleaves up for Wales.
    Click on Simon, or go to wsc.wales.

    • Did this whole problem arise when the pound sterling left the gold standard in 1971 ?
      Would gold be a better measure of wealth ?

  8. Though I do empathise with older and more frail people who will have to travel to the next town to visit a bank branch, the footfall figures speak for themselves. The last bank in Llandysul closed in November, but speaking to older residents, you would think that the entire world was coming to an end. They don’t seem to understand they can take money out of an ATM and deposit it at the Post Office into one of around 20 banks. Suddenly, you can bank your cash at Santander and Halifax and other branches that were never in such towns.

    Most people find visiting a bank a kerfuffle and I only went in for the first time in three years to bank a cheque and even then they made me deposit it in a machine. I can now take a photo of my cheque on my banking app and send it to them. My dad is 64 and has been banking online for 10 years so I’m not sure if age is an excuse.

    The telegram disappeared as did phone boxes and video shops but people didn’t complain. The head of Barclays isn’t sitting in his palace in Qatar worried about folk in rural Wales, sorry. Banks are a business like any other. If you have a shoe shop but fail to sell any shoes, your shop will close. If you don’t have enough people through your bank branch door, it will close. In Llandysul’s case, the Natwest only had 18 customers per week by the end. Barclays did little better with 56.

    If anyone honestly thinks a bank has any social or communal responsibility, then they are kidding themselves. They are not social centres. I would prefer if people found more sincere ways of socialising. Join a club, the WI, the chapel, the church – anything. There are two ways forward: Support your post office and hope facilities improve or set up a Banc Cymru network of branches.

    Or, do as the Swedes and Norwegians do: get rid of cash altogether.

    Isn’t it nice though that so many old people have so much money? They are the ones with free bus passes and all the time in the world. Perhaps it will be an excuse for them to have a day out.

  9. The ones who leave are the ones who are struggling. Maybe now is the chance to replace them with a national bank of Wales, that’s more close to home and puts Welsh banking on the map of Wales.

  10. Ben….look at the Kiwi bank model in NZ. Developed because all major banks were bought by the Aussies

  11. While I’m sympathetic to the problem, it’s hard to think of a workable way to force a business to operate at a particular location if it cannot do so profitably. That goes for the Post Office as well, which is why relying on Post Offices to take up the slack, when they themselves are in retreat, doesn’t seem like a workable solution.

    In the long term, physical bank branches are as much an anachronism as [to quote JD, above] video shops and we should concentrate on helping people to use the alternatives to them rather than expending money (especially public money) on keeping them open beyond their useful lives. If public money is to be spent, it should be in improving broadband coverage in rural areas and helping people to make use of it (e.g. by putting free banking terminals and/or cash machines in public places, pubs or community centres). If we really wanted to force banks to keep rural branches open, the only way I can think of doing it would be to encourage town and city branches to ‘twin’ with rural branches, decreasing their business rates if they do and raising them if they don’t. In practice however I suspect that this would only accelerate the closure of branches in towns and cities, which is going to happen in the long term anyway.

    For what its worth, I think that over the next decade or two, blockchain technology is going to sweep away most of the banking sector as we currently know it. Even if (as I strongly suspect) the current Bitcoin surge is just a bubble which will burst in due course, the underlying technology is here to stay and will be even more far-reaching than the internet itself.

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