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Summary
- Footsie-listed banking giant HSBC Holdings Plc may close two of its main branches in Scotland.
- The deserted high streets in the wake of lockdown have led to a steep decline in footfall of consumers in bank branches.
HSBC (LON: HSBA) is planning to close its prominent branches -- Falkirk’s High Street and Edinburgh’s Princes Street in the upcoming months, and the UK branch footprint of the bank would come down to 511. Notably, the closures of two branches would reduce the count to eight in Scotland. The bank staff posted in those two branches will be allotted new roles in the nearby branches or offices. During the year, the bank might close around 85 branches in a phased manner.
The deserted high streets in the wake of coronavirus induced lockdown have led to a steep decline in footfall of consumers in bank branches. Moreover, consumers are now shifting towards online banking for basic transactions.
Notably, the technological advancement in banking allows the users to carry out most of the transactions. During the pandemic, even account opening was carried out online in some geographies.
Also read: Planning to Visit HSBC? Do Wear A Face Mask or Else Your Account Can Be Withdrawn
From a bank’s perspective, there are confidentiality risks of working from home. Time and again, the financial watchdog Financial Conduct Authority (FCA) has emphasised on the need for compliance. The FCA has directed the financial institutions to recognise the new risks regarding the identification and handling of sensitive information as most of the employees are working remotely.
(Image source: ©Kalkine Group 2020)
The prevalent uncertainties in the market and changed dynamics of the work environment calls for the implementation of vigilance procedures to avoid any breach of confidentiality and possible leaks of sensitive information. Any kind of misconduct or breach of information could lead to reputational loss and a huge dip in investor’s confidence.
In addition, failures in identifying suspicious transactions and poor AML, banks could be penalised by the apex regulatory authority. The pandemic led environment has forced the banking and financial services company to make changes to their modus operandi and its network.
On the flip side, HSBC is planning to invest in classifying branches in terms of the services offered. Each branch is expected to offer distinct services. HSBC is making the investment to create a network of branches, i.e., from temporary pop-ups to fully serviced bank that offer selective services.
The changes made by HSBC are the need of the hour in the sphere of banking sector amid the pandemic influenced trading conditions.
