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Bank branch closures open mortgage clients up to better advice and products

  • 30/11/2021
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Bank branch closures open mortgage clients up to better advice and products
The closure of high street bank branches can drive borrowers to seek mortgage advice from a wider range of sources including intermediary firms, brokers have said.


This was in response to the news that TSB would be closing 70 of its high street branches next year, a move which could potentially impact customers who use in-person banking services. 

The bank said it had seen a steady decrease in branch use over the years as customers shifted to digital alternatives. TSB claimed over 90 per cent of its customer transactions were now carried out digitally and said video banking accounted for over 90 per cent of mortgage appointments. 

David Hollingworth, associate director, communications and London and Country said many customers, particularly older ones, would be “disappointed” to see the removal of their local branch but acknowledged there was an indisputable shift to online banking. 

He said there would always be those who start and end their mortgage searches at bank branches but said closures could make some customers seek alternatives.  

Hollingworth added: “More and more understand that this [in-branch advice] is unlikely to help them zone in on the best deal or lender for their particular requirements.” 

He said this was notable in the rising proportion of business written by advisers during a time when access to branches was limited because of the pandemic.

In September, the Iress Mortgage Efficiency Survey showed intermediaries completed 90 per cent of cases in 2021, an increase from 77.5 per cent previously. 

Niamh Byrne, senior mortgage adviser at Financial Advice Centre, also said it was no surprise that banks were adapting to be inclusive of the online world but agreed that this would not necessarily mean less access to mortgage advice. 

Having recently joined TSB’s broker panel, Byrne said the bank was “expanding its broker network to ensure customers are still able to access their mortgage services – albeit through a different channel.” 


Benefits for brokers and clients 

Byrne said branch closures had resulted in clients coming to her firm in lieu of a local bank, but said it was also accessibility and choice which led people to the broker. 

She added: “Even when local branches are open, it has become increasingly difficult to arrange face-to-face appointments when working a 9-5 schedule. We all know that the housing market, especially this year, is fast paced and customers simply cannot wait weeks for a branch appointment; which again has driven customers to seek the flexible and accessible advice that brokers offer.” 

Hollingworth also noted that turning to broker firms could also allow clients to get advice in a way which suited them.  

He added: “The variation of broker businesses means that customers can deal remotely and still have the benefit of advice across the market or if they prefer there’s likely to be a high street adviser.  

“The key point is that they will get broader advice than they can get in a branch and that is what increasingly savvy borrowers will be looking for.” 

Ultimately, Hollingworth said it was difficult to point to a direct link between bank branch closures and increasing client numbers for intermediaries. However, he said in the long run, reduced means to seek help in-branch strengthened the message around why getting advice was important. 


Improved mortgage offering 

Sebastian Murphy, head of mortgage finance at JLM, said closures did not make a huge difference to the split of intermediary business as the majority of mortgages were already arranged through a broker. 

However, he said if banks reduced their expenses with such closures, they could potentially improve product offerings. 

Murphy added: “We believe this is a good outcome for consumers, because if lenders can reduce overheads in these areas, they will then offer more competitive products through their distribution channels.” 

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