A third of Britain?s high street banks will close their doors in the next five years as consumers rapidly adopt Internet and telephone banking, according to a report out today.
Deloitte Consulting, the management consultancy, which surveyed more than 200 bank executives for the report concluded that call centres and the Internet will become equally as important as high street branches.
It forecasts that as many as 3,600 of the 11,000 traditional high street banks remaining in the UK will disappear in the first five years of the new millennium.
"The level of investment at the eight major UK retail banks to fund the implementation of technologies enabling these new marketing channels has increased dramatically over the past decade, from the launch of First Direct, the first telephone bank, in 1989 to an anticipated investment of hundreds of millions of pounds among the major UK banking groups in 1999,? explained John Harrison, a partner and retail banking specialist at Deloitte Consulting.
The survey maintains that the change in the picture of UK banking is being driven by customers who have rapdily adopted both the Internet and call centres to handle their personal finances. Deloitte predicts a bigger spend on IT in banking as funds are freed up following the completion of Y2K compliancy projects.
The biggest worry in this change will be the 3.5 million people in the UK who don?t have bank accounts.
"As customers increasingly transfer to new technologies to communicate with their banks, one of the key issues will be how the banks manage to reach the underprivileged - those who don't have access to a telephone or the Internet - or who are ill-equipped to deal with the personal communications issues they present," explained Harrison.
Industry watchers are already worried that the uptake of home networking and the Internet in the US is already creating a society of ?have and have nots?.
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