The future of high street banking? It's time to wake up and smell the coffee

It was a rainy day in a city renowned for them, but the weather was no more miserable than I was on leaving the Royal Bank of Scotland’s branch on the Oxford Road, outside the University of Manchester.

I’d just been told, after an interview that felt like being called into the head teacher’s office, that my overdraft would not be extended. Since that day, long ago, I’ve only darkened the door of a bank branch on three occasions, and only then because the banks concerned insisted upon it for paperwork purposes.

Lloyds, however, has been telling me that things are different today. The modern bank branch is supposed to be a friendly place. Staff, I am told, can be counted upon to present a sunny face – even when they have to say no.

So I challenged the bank to prove it. Which is why I was visiting its branch on Marylebone High Street, London, in weather that even Mancunians might consider to be unusually unpleasant for the middle of the summer.

If, like me, you are among the millions who have migrated to telephone and internet banking, this branch of the future will not be like those you remember.

The first change is the manager. He’s a long way from the fusty, middle-aged, slightly pompous, but still eminently respectable figure of legend. Nor do you have to knock respectfully on the door of his office to get to see him. He’s young, polished, and impeccably dressed. What’s more, he’s at the front greeting customers as they enter. And he’s even smiling.

The second surprise is the decor. It’s more reminiscent of a hotel lobby or one of BA’s business-class lounges than the rather forbidding places that I remember. Comfortable chairs in soft greens are set in front of low-lying tables where the iPads are at the ready, logged in, of course, to bank’s website. And those racks of leaflets that used to be commonplace are gone.

Also consigned to the dustbin of history are the rather forbidding screens erected to deter the bank robbers of the Sixties and Seventies. If you want to deposit funds you will be guided towards the back of the branch where a smiling teller will take your money and drop it into a safe – one to which she has no access.

This tactic appears to have worked in deterring would-be robbers. With visions of the Seventies cop show The Sweeney in mind, I ask about the number of “blags”. Andy West, who has the imposing-sounding title of “retail footprint director”, puts the number at just one across the entire screen-free estate, which currently accounts for about a quarter of the bank’s total of more than 2,000 high street branches.

The message appears to have been received by the criminal classes. There’s not much point threatening a teller who doesn’t have any more access to the cash than you do. But if this is the branch of the future, it will be one of a diminishing number.

Over the next three years Lloyds has said it will close 200 branches for good, although that number will be partly offset by 50 new openings. Project that across the industry – all of Lloyds competitors are planning their own downsizings – and more than 800 bank branches could disappear from Britain’s high streets over the period.

That’s probably a conservative estimate. “What we have said is that we expect to increase our share of the overall number of branches,” says Mr West. “We expect our competitors to consolidate faster.”

The survival of the branches that remain will depend on customers making use of them. According to Mr West, while the figures continue to show a steep decline in the number of visits, those who do darken his doors are looking to complete bigger, higher‑value transactions.

Hence the comfy surroundings. You’ll be offered an acceptable coffee – Caffe Nero needn’t worry but I’ve had worse at some very grand investment banks – and there’s even a tub of those bite-sized chocolate bars should you care to indulge.

A little box on the ceiling pumps in the gentle aroma of a tea shop, and inoffensive pop music plays in the background, the latter courtesy of one Trevor “Bruno” Brookes, who, with his Radio One days over, has made a successful business supplying radio to organisations like Lloyds.

If anything’s to change, it will be the addition of more functions that will enable customers to do things for themselves, thus keeping costs down. As you might expect, Mr West has researched the shape of branches all over Europe and beyond. And what he finds frustrating, he says, is the limitations put on what he’d like to do by some of the behaviour that is sadly not uncommon in Britain’s town centres.

“That is always the challenge in the UK. Across Europe they manage high streets better, and there is a lot more investment put into it. There seems to be a lot less antisocial behaviour.”

So has he done enough to convert me?

Despite the friendly face that Lloyds – and others – are trying to present to the world I’m not going to change my habits. The telephone and the internet are just too convenient. I spend my entire working week writing about finance and I don’t want to spend any more time than is necessary dealing with the personal side of it.

But, surprisingly, I’m told that is a function of my age. If there is a future for the bank branch it is a youthful one. Mr West explains: “There is a thought that the new generation coming through will reject branches and so what will be the purpose?

“Actually, when you do focus groups, while that generation is aware of all the channels, and is confident about using them, they don’t understand money.

“They are often frightened about making big financial decisions so they are very likely to be in the branch because they want the face-to-face contact.

“They want help because they don’t always trust themselves to make big decisions with a mouse.”

Out

* Manager in private office, seen by appointment

* Stacks of leaflets promoting products and interest rates

* Cashiers behind screens

* Branches on every high street in the country

In

* Manager greets you at the door

* iPads logged into bank’s website

* Scents and ambient music

* Armchairs and free coffee and chocolate