British financial giant Lloyds Banking Group has announced plans to shut 136 branches across its Lloyds, Halifax, and Bank of Scotland brands as customers increasingly turn to digital banking services. The closures, set to take place between May 2025 and March 2026, are part of the ongoing transformation of the UK’s banking sector, which has seen a major shift toward mobile and online banking.
Branch Closures Across Multiple Brands
According to the Financial Times, the closures include 61 Lloyds branches, 61 Halifax locations, and 14 Bank of Scotland branches. This decision is part of Lloyds’ broader efforts to streamline operations in response to the growing demand for digital financial services.
In a statement, Lloyds said that over 20 million customers now use its mobile apps to access their accounts, reflecting a significant shift in consumer behavior. Employees affected by the closures will be offered opportunities at other branches or within different areas of the bank’s business operations.
Digital Transformation in the Banking Industry
The rise of digital and mobile banking has led to branch closures across the UK, with banks aiming to reduce costs and invest in digital services. Research by PYMNTS Intelligence shows that 42% of consumers conduct their banking online, with nearly 69% using mobile apps at least once a month.
Banks are also expanding their tech infrastructure to offer services like instant payments, digital account openings, and embedded finance, reshaping the way financial institutions engage with customers.
Impact on Communities and Access to Cash
While the digital shift has provided greater convenience for many consumers, 3 million people in the UK still rely on cash, according to the Financial Conduct Authority (FCA). In response to branch closures, the FCA implemented new “access to cash” rules in 2023. These regulations require banks to ensure that communities retain free access to cash withdrawal and deposit facilities before proceeding with branch shutdowns.
“Many small businesses still need a secure location to deposit their daily earnings,” said Sheldon Mills, the FCA’s executive director of consumers and competition. “Our new rules ensure that banks provide reasonable access to essential financial services.”
The FCA reported that 1,358 branches across England were closed in the two years leading to June 2023, highlighting the ongoing challenges posed by the shift away from brick-and-mortar banking.
Also read: RBI Governor Urges Banks to Bolster Cybersecurity
Lloyds’ Future Footprint
Lloyds was already in the process of closing 55 branches between January and September this year, according to the trade union Accord. Following this new round of closures, Lloyds Banking Group will operate 757 branches across its three brands.
As the UK’s financial sector continues to evolve, banks face the challenge of balancing cost efficiency with maintaining critical financial services for underserved communities.
