Allpoint Blog

Would the Last Bank to Leave Town Please Turn On the ATM?

Cardtronics UK was recently mentioned in several news pieces and social media posts about the installation of a 24-hour, free-to-use ATM in the North Wales town of Blaenau Ffestiniog.

Normally the launch of a cash machine doesn’t garner much attention, such as the participation of a Member of Parliament in the event.  However, this installation meant the end of six months without dependable, round-the-clock access to cash for the 5,000 residents of this historic town.   In September 2016, the last bank in Blaenau Ffestiniog left town – taking its ATM with it.  Three ATMs still existed in the town, but on one particular Sunday following the closure, none of the town’s three cash machines could be used, reported the Daily Post.  Two were in stores that were closed for the day, and the third was out of order.


This was not good for Blaenau Ffestiniog, and its growing weekend tourist industry.  Thus, the county MP Liz Saville Roberts and the town’s government and business leaders began working on a solution.


On February 15, 2017, their efforts produced results with the opening of a new, free-to-use, 24-hour cash machine operated by Cardtronics UK and installed outside the town’s Co-Op store.


Cardtronics is proud to have been able to help Blaenau Ffestiniog.  But the loss of banking services for a town like Blaenau Ffestiniog is happening all over the U.K. and in some areas in the United States.


This level of impact is not just being seen in the U.K.  In October 2016, the Charlotte (N.C.) News-Observer reported on the closing of the last bank in Rich Square, N.C.  “What business is going to come to a town with no bank?” the paper quoted the town’s mayor as asking.

Between 1989 and the end of 2015, the number of bank branches in the U.K. dropped 53 percent.  S&P Global Market Intelligence reported in October 2016 that 1,600 U.S. branches closed in the prior 12 months.

The prevailing wisdom is that financial institutions are closing branches in response to multiple forces.  Those include the pressure to improve efficiency ratios by reducing costs – a brick-and-mortar branch costs more to operate.  And customers are visiting branches less frequently and instead use online and mobile banking or non-bank financial institutions for services.  For example, The Guardian reported in September 2016 that customer interactions in the U.K. dropped from 478 million in 2011 to an estimated 280 million in 2016.

However, when a branch is closed – particularly if it’s the last one in a community – there is a far-reaching impact on the consumers left behind.  Blaenau Ffestiniog is an example.  Its livelihood is largely dependent on weekend tourists interested in the town’s history as a booming slate mining center in the 1860s to the 1870s.  In describing the September ATM outage, The Daily Post said, “The cash flow problems left some traders worried that the situation could bankrupt the town’s tourism industry.”  


Back in North Carolina, the amount of full-service FI branches fell by 11.7 percent, with the majority in rural areas.   The state’s Rural Economic Development Center claims that these closures have created numerous “banking deserts,” defined as having less than .02 branches per 1,000 in population. The fear is that these closures handicap communities that are already struggling financially.

That fear may be well founded.  A study by a Massachusetts Institute of Technology economist found that after a branch closes, loans to small businesses in the area fall by 8 percent for several years after.   The situation has been similar in the U.K.  Lending in communities that had lost their last branch fell 104 percent in the years following the closing, according to a June 2016 report from the (former) Move Your Money organization.

Fortunately, some financial institutions, industry organizations and government officials have developed strategies to lessen the impact of bank closures.

In Blaenau Ffestiniog, MP Roberts worked with town councilllors, the local Co-op store and Cardtronics UK to bring the new ATM to town.  In Rich Square, N.C., a coalition of local civic and business groups persuaded the bank to take several steps, including installing a deposit-friendly ATM.

Easy-to-access cash machines and other technology like mobile banking and fintech innovations can fill in the geographic distance between households and small businesses in one town and branch in the next largest town. In addition, some financial institutions have even filled in the void of the higher-end services of lending and investing offered in the branch in the next largest town.

For instance, The Guardian reported last year that in another small U.K. town, Caversham in South East England, a branch slated for closing was instead outfitted with Skype-like screens for customers to use to speak remotely with experts about loans and other needs.

And back in North Carolina, the bank that closed shop in Rich Square committed to provide account holders living there classes on online and mobile banking and travel vouchers for free bus service to the nearest brick-and-mortar branch.

Whether it’s changing consumer preferences, a strategic merger, a cost-saving measure, or a combination thereof that cause a branch closing, the potential impact on the surrounding community –especially account holders – needs to be well understood.  Options as simple as an outdoor, deposit-friendly ATM or as creative as virtual tellers on screen can help ease the pain for banking customers.


Tim Halford
Managing Director
Cardtronics UK


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