Is branch banking dying?

Yesterday I visited my bank. Whilst waiting my turn to be seen I was behind a lady drawing out a large amount of cash. The transaction took about ten minutes, because the cashier had to ask her a lot of questions. Why did she need it? Could she not send an electronic payment? Was someone asking her to make the payment? Gone are the days when the only question she'd have been asked would be, "How would you like it?"  

It get the questions. Fraud and scams are everywhere these days, and the banks have a duty of care. They need to ensure they're not responsible for a customer losing their money. Helping to educate customers of the risks of a transaction is no bad thing. It just gives the impression that cash is no longer seen as a major force in banking.

It seems strange for me to say that, but cash is something that is becoming increasingly irrelevant to most people. I rarely carry it around. Pretty much everything I pay for is done via a card tap. In fact the number of venues around that only accept electronic payment is increasing. I rarely need to go to a bank these days, maybe only once or twice a year. Even getting foreign money isn't needed as most countries are the same.

Is this a good thing? On the personal security and convenience fronts, maybe. You could argue that having a bank card stolen is worse than dropping £20 from your pocket as you take your car keys out. Online banking definitely makes paying bills easier and quicker for both parties. For a start you can do so at any time of day. I'm sure the tax authorities like it too, as there's a trail they can follow.

On the personal front, I understand some find the lack of human contact difficult. Local bank branches can be like a local pub. I'm reminded of a lyric from the Cheers TV show theme song:

"You wanna be where you can see our troubles are all the same.
You wanna be where everybody knows your name."

The lack of a friendly face is something people miss, particularly those who don't have a lot of social contact. It's a chance for some interaction, to talk about the weather or the latest football match, whilst doing business.

Will bank branches be here when my nieces and nephews are my age? I'll stick my neck out and say probably not. At least not in their current form. Just like when I first went to a bank, the role of banking has changed and continues to change. At the end of the day bank branches have to pay for themselves. They're expensive to run. The number of UK bank branches has been declining for some years, and will continue to do so. The way we live our lives financially has changed, and the banks must react to this.

The Youth Hostel Association's future

Many years ago, I joined the Youth Hostel Association (YHA) as a life member. I can’t remember how much it cost, possibly about £100, but it was an easy decision. The primary reason I did was because they offered a good discount when you buy goods from a range of outdoor activities shops. As someone who enjoys an outdoor lifestyle, paying less on everyday essentials was attractive. It was a purely financial decision.

Today I cancelled my membership. Why?

Hostels versus hotels

I’ve never stayed in a YHA hostel, and never will. As a hostel rather than a hotel, even if they are more up market, the idea of sharing a room with a total stranger doesn’t appeal. Neither does having to go outside your room to visit a shared bathroom.

The YHA has made efforts to make themselves more appealing to a more discerning clientele. Some hostels have private rooms with a bathroom, but they still have bunk beds which range in number from two to eight. Having eight beds is useful if you’re travelling in a group, but it’s not for me.

Location, location, location

“To enrich the lives of all, especially young people, by providing brilliant hostel stays and experiences that improve physical health, mental wellbeing, and life skills.”

The YHA’s mission statement perfectly describes why it exists. There are around 150 hostels in the UK with most in rural locations, although there are hostels in towns and cities. This lends itself to those going walking, cycling, or climbing in the great outdoors.

Together with the mention of “especially young people” and the YHA’s mission seems a perfect fit to a slightly bygone age. An admirable age maybe, just one that lacks resonance these days.

It’s all about the money

Cost is also a factor. For a two bunk private room, the cost is approximately £80. That’s cheap, but when you’re competing with hotel chains like Premier Inn and easyHotel, it isn’t as attractive. They have double beds with a bathroom. You pay your money and make your choice, but I know which one I’d pick.

The future?

The YHA is selling off some of its hostels. You can still book a stay in them, but they won’t be managed directly by the YHA. The reason this is happening is financial. As a charity, it must raise funds to support its work. The Covid pandemic hit the charity hard, and it’s trying to recover from it.

The market for those wanting a hostel experience is there, but it is dwindling. With most young people having access to cars, the need to stay in a rural location isn’t as attractive. Being able to come home to a cheap and clean hotel near good restaurants and bars appeals. That’s worth paying a bit more for.

Will the YHA exist in 50 years? Probably, but it will be a much more niche organization with fewer properties. That’s a shame, but like any other business, it needs to keep up with the times.