Impact of Bank Branch Closures on Local Communities and Shopping Habits in the UK

This research proposal investigates the impact of bank branch closures on local communities and shopping habits in the UK. It aims to identify the reasons behind the closure of banks, the implications of the closure on local communities, and the influence of bank closures on shopping habits. The proposal uses a descriptive research design, inductive research approach, and qualitative data collection methods.

Running head: BUSINESS MANAGEMENT RESEARCH
Name of the Student
Name of the University
Author note

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Table of Contents
Introduction:...............................................................................................................................2
Problem Statement:....................................................................................................................2
Research aims and Objectives:...................................................................................................3
Research Questions:...................................................................................................................4
Literature Review:......................................................................................................................4
Methodology:.............................................................................................................................7
Research Design:....................................................................................................................7
Research Approach:...............................................................................................................7
Sample Technique:.................................................................................................................7
Primary data assemblage:.......................................................................................................8
Qualitative Data:....................................................................................................................8
Gantt chart:.................................................................................................................................9
References:...............................................................................................................................10

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Introduction:
Banks are one of the strongest pillars, on which the financial and the overall economic
wellbeing of any economy stands. It brings in a sense of fiscal safety to the citizens and the
business firms of any economy. Banks serve as the most effective medium, whereby safety of
the funds of the general public in ensured. In many cases, they also serve as one of the most
important source of income by providing direct employment to the bank staffs and by
providing interest incomes to its customers. They perform a wide range of activities, right
from accepting deposits, granting loans of various kinds and protecting the financial
wellbeing of any country. Thus, the importance of banking and banks, cannot be downplayed.
Nevertheless, with technology, sweeping humans off their feet, the need of physical branches
of banks, have been on a diminishing trend. This scenario is very much visible in the United
Kingdom. The bank branches have failed to keep up with the rising technological spree. As a
result of which, this has led to the closure of the branches of some of these banks. These
closures have had a significant amount of impact upon the local communities and shopping
behaviour. In this proposal, this impact has been researched upon.
Problem Statement:
The closure of banks has become an important problem for the people of the United
Kingdom. Closure of banks tantamount to the loss of the institute the safety of the money of
the people of the United Kingdom. The closure of banks has had a significant amount of
impact upon the local businesses, jobs and the shopping habits of the people. The closure of
banks, especially in the last three years has left a lasting impression upon the British citizens
and the businesses. These kind of in-person financial services would not be available. These
closures can take place due to a variety of reasons, such as rapid technological development,
rising competition and many such unforeseen contingencies, which might compel them to

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shut down. These impact and results of closing of bank branches on the local communities
and their buying habits have been proposed through this research proposal.
Research aims and Objectives:
The aims and objectives assists in bringing into the lime light, all the possible aims
and objectives, which is behind any research proposal and this proposal is no different. Every
research proposal is prepared keeping in mind the aims and objectives, which the concerned
proposal aims to achieve. In this proposal concerning the closure of banks in UK and its
impact have been discussed. Thus, all the different aims and objectives of the concerned
research proposal has been discussed:
1. One of the primary aims of conducting this research proposal is to investigate all the
possible reasons and causes behind the closure of the banks in the United Kingdom.
The reasons, which have played a significant role in the closure of the branches of
some of the most well-known banks of the United Kingdom
(Eprints.nottingham.ac.uk 2018). Closing of bank branches is increasing in an
alarming proportion. A thorough enquiry into the causes must be initiated.
2. As the closure of banks would have significant amount of impact upon the different
sections of the population, as a result of which, it is one of the objectives of this
research proposal. Here it is aimed at looking into implications of the closure of banks
on the local communities. As local communities remain heavily dependent on the
banks for addressing their financial needs and requirements, as a result of which, the
closure of banks, affects their life and well-being in a big way. Thus, these effects
must be looked into with careful analysis.
3. Another significant aim of this proposal is to look into the impact of the closure of the
branches of the different banks in the United Kingdom on the shopping habits of the

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people (Skinner 2014). Traditionally, customers used to visit their bank branches for
mitigating their financial needs and requirements, but now banks want to reduce
additional costs, leading them to close loss making branches. This would have a huge
impact on the shopping habits of people, especially for those residing in the rural
areas as these people still cling to face to face communication for certain kind of
transactions (BBC News 2018). Closure of branches, would naturally have a huge
impact on the shopping habits of the people, which needs to be taken care off.
Research Questions:
 What are the possible causes and reasons which have compelled the closure of
banks in the United Kingdom?
 What impact and necessary implications does the closure of banks in United
Kingdom have on the local communities in the United Kingdom?
 How the shopping habits of people in the United Kingdom are influenced by
the closing down of the branches of the banks in United Kingdom?
Literature Review:
Since the dawn of the technology era, its impact on the day to day business and
banking activities have been very intense. In today’s world, most of the activities are done
with the help of computers and technology and banks are no exception to all this. Some
financial commentators and experts are not appreciative of the idea of the importance of
branches, which are considered to be ineffective and inefficient and expensive of a pre digital
banking system (King 2012). Branches are no longer important as they were back in its
yesteryears. Banks today do not rely too much on its branches for raising funds, as it can be
raised through the market in the form of debt and equity shares and from the digital mediums,
such as internet banking and other such allied forms. Moreover, the physical access to bank

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branches has increasingly been seen as a part of the financial exclusion (Devlin 2005). A
longitudinal analysis of some of the important banks in Britain reveals that the number of
branches have been on a consistent decline since 1989. Bank rationalisation has been the top
priority for many banks as they intend to close down those branches with low performances
and those operating in areas which have low population and scattered consumers and clients.
Branches are seen today as a reasonable expensive ways of providing financial services
(Walker 2018). The service provided by these branches have been supplemented by the form
of ATMs, telephone banking and mobile banking, just to name a few. In order to supplement
the decrease in the number of bank branches, emphasis is being laid on the option of self
service. The banks today are increasing the scope of providing the various facilities of self
service. For this purpose, the banks have introduced many kinds of self-servicing options,
with internet facilities at the very heart of it.
When the demand for any bank branch fails to cover its minimum fixed costs, it is highly
recommended that the closure of branches is not initiated. Although it becomes a different
scenario, when there is only one single branch which is operating in the market, more
preferably if it is a rural market or a market where old aged people for the major crunch of
the customers. Then in this particular case, the closure of banks will not play a significant
role and it is highly recommended that the action of shutting down of such kind of sole
branch in any particular area is not recommended (Personal.rbs.co.uk 2018). It has also been
reported in the earlier researches that the rate of closing down of high cost branches are more
frequent than of those which are not high cost but are of low cost nature. It is down with the
intention of cutting down of the losses of the high cost branches which are operating in a
rural ate or a semi urban are where there is a dearth of demand and the population of the
effective market is very much scattered (Fudenberg and Tirole 1986). In this case,
(Ghemawat and Nalebuff 1985), were one of the earliest ones to prove the equilibrium

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solution in an exit game concerning market players, in an oligopoly market with a very
inconsistent and declining demand is the one where the size of the and not the cost influences
the exit of the market players and the sequence of the exists. When one or more firms are
lined up for their exit and those who operate in the same market. In this case only one
proposition remains clear, which is, if the markets are the same, then the firm which has the
largest amount of banks in the market will close its branches, as it would like to take
advantage of the various industry profits (Sutton 1990). The closing down of banks has
continued in the recent years and is still continuing to a large extent. Till the year , the trend
of closing down of banks has continued, which has left almost communities without any kind
of financial help or medium and almost left 840 communities without any kind of financial
assistance or mediums to help them out. The figure given below provides a good amount of
estimate of the different closure figures of the banks between 2013-15.
(Source: CBS, 2017)
There were approximately 20,583 branches in the year 1988, but it was reduced to 8837 in
2012. The total number of banks have drastically decreased since the year 1997, the total
banks in the year 1997 was 13,349 and it was reduced to a total of 9216 in the year 2014. In

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the same way, the total number of post offices were reduced from 19,020 in the year 1997 to
11,643 in the year 2016. Although much has been said about the causes of the closure of the
bank branches, but one of the most severe point which has been missed, is the impact which
these kind of closures would have on the local communities and their shopping habits. This
serves as an important gap in the literature between the earlier researches and the present one.
Methodology:
Research Design:
It refers to the particular set of methods and processes which is used in the process of
collection and for analysing the measure of the variables which are linked with the research
problem. The important factors which requires to be corroborated with regards to the main
topic are to be looked into in details (Marczyk, DeMatteo and Festinger 2017). This specific
research is of descriptive nature. In other words, it is the skeleton or the map which needs to
be adhered to for answering the research questions.
Research Approach:
Research approach is one of the most important aspects of any research proposal. For
this purpose, inductive and deductive research is used. In deductive approach, the main task
is performed by deducting conclusions from the previous assumptions, propositions and
premises. In inductive approach, the data and the related areas which are collected are
analysed for the purpose of identifying a pattern or a relationship (Neuman 2013). Here the
inductive approach has been used in order to understand the patterns and relationship
between the bank closures and its impact.
Sample Technique:
Several methods and techniques of sampling do exist. These prominently include
“non-probability sampling, simple random sampling, systematic sampling, stratified

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sampling, cluster sampling, quota sampling and mini-max sampling among the most
prominent ones. In this specific research on the impact of closure of bank branches on the
local communities and the shopping habits of the people, simple random sampling. This
technique is very much accepted regarded as better method of selecting a sample from the
population because each localities or the participating person would be given a chance. In
case of the sample size, the interviews of the closed banking managers and the local
customers of the closed banks would be taken into account.
Primary data assemblage:
It is a good initiative to conduct this research by collecting primary form of data, as
this would lend originality to the collected information. This could be done in the form of
conducting questionnaires and interviews. Being an open ended survey, questions which
would be asked, would be of open ended nature.
Qualitative Data:
Both qualitative as well as quantitative data are important for conducting any kind of
research proposal. The method which is chosen must be accurate and should justify its
importance with the project. It is one of the most important forms of data, which reflects a
holistic approach towards the problem (Lewis 2015). It is about the qualities of the
information which is collected from the participants of the survey, questionnaires and the
interviews. It includes all those kinds of information which cannot be quantified or measured.
It is concerned with the complete understanding of human behaviour from the perspective of
the informant (Symon 2018). Observation plays an important role in this procedure. In this
proposal, qualitative procedures would be used on an extensive manner, in order to assess the
relative impact of bank closures on its customers.

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Gantt chart:
Main
Activities
1ST Week 2nd week 3rd week 4th and 5th
week
6th and 7th
week
Topic
Selection
Project
objective and
scope
Literature
review
Research
methodology
Data
Analysis and
interpretation
Results and
discussion

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References:
BBC News. (2018). Banks shut 600 branches in past year. [online] Available at:
https://www.bbc.com/news/business-36268324 [Accessed 18 Jul. 2018].
BBC News. (2018). Lloyds Banking Group to close 49 branches. [online] Available at:
https://www.bbc.com/news/business-43802021 [Accessed 18 Jul. 2018].
Eprints.nottingham.ac.uk. (2018). [online] Available at:
http://eprints.nottingham.ac.uk/2199/1/ChangingGeographyofBritishBank&BuildingSocBran
chNetworks2003-2012_FINAL.pdf [Accessed 18 Jul. 2018].
Johnsen, G., 2014. Bringing down the banking system: Lessons from Iceland. Springer.
Lewis, S., 2015. Qualitative inquiry and research design: Choosing among five approaches.
Health promotion practice, 16(4), pp.473-475.
Marczyk, G., DeMatteo, D. and Festinger, D., 2017. Essentials of research design and
methodology. John Wiley.
Neuman, W.L., 2013. Social research methods: Qualitative and quantitative approaches.
Pearson education.
Personal.rbs.co.uk. (2018). Branch closures | Royal Bank of Scotland. [online] Available at:
https://personal.rbs.co.uk/personal/ways-to-bank/branch-banking/branch-closures.html
[Accessed 18 Jul. 2018].
Schoenmaker, D. and Siegmann, A., 2013. Efficiency gains of a European banking union.
Skinner, C., 2014. Digital bank: Strategies to launch or become a digital bank. Marshall
Cavendish International Asia Pte Ltd.

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Symon, K. (2018). Fresh controversy over RBS leaked 'branch closure' document. [online]
businessInsider. Available at: https://www.insider.co.uk/news/rbs-branch-closures-leaked-
report-12534299 [Accessed 18 Jul. 2018].
U.K. (2018). British banks set to close record 762 branches this year. [online] Available at:
https://uk.reuters.com/article/uk-britain-banks-branches/british-banks-set-to-close-record-
762-branches-this-year-idUKKCN1B31AY [Accessed 18 Jul. 2018].
Walker, P. (2018). Labour plans to halt 'epidemic' of high street bank closures. [online] the
Guardian. Available at: https://www.theguardian.com/business/2017/apr/14/labour-high-
street-bank-closures [Accessed 18 Jul. 2018].
Whymark, B. (2018). The changing consumer behaviours driving high street bank closures.
[online] Eastern Daily Press. Available at: http://www.edp24.co.uk/business/the-changing-
consumer-behaviours-driving-high-street-bank-closures-1-5304712 [Accessed 18 Jul. 2018].