BANK branch closures mounted last year as Britain's traditional lenders shifted their focus online in a bid to fend off competition from a new wave of digital-only rivals.
The total number of UK bank and building society branches declined by 17 per cent between 2012 and 2018, falling from 13,345 to 11,065.
The decrease was driven by a 20 per cent contraction in banks' branch networks, while those of the building societies were largely unchanged.
According to a new report from Moody's Investors Service, the rising take-up of digital banking has driven a continued contraction in banks' branch networks.
Almost three in four UK adults, or roughly 34m people, used online banking last year.
"UK regulators have authorised 41 new lenders since 2013, including four digital-only banks, and there are also an estimated 1,600 fintechs operating in the country," said Arif Bekiroglu, vice president and senior analyst at Moody's.
Bekiroglu added: "These challengers have taken market share from incumbent banks in payment services, and they look set to benefit further from the 2018 Open Banking initiative, which gives third parties conditional access to established banks' customer data."
However, the credit ratings agency said that despite their early success in payment services, "digital banks and fintechs have made relatively few inroads so far into the market for core banking services such as deposit-taking".
"This is partly because incumbents have defended their franchises by digitalising their own services. Established banks have also selectively forged partnerships with fintechs in order to gain access to innovative ideas or technology," Moody's Investors Service added.
(c) 2019 City A.M., source Newspaper