Internet banking threatens high-street branches

One in three bank branches in the UK could be forced to close as a result of Internet banking, according to a report out today from Deloitte Consulting.

More than 200 executives from the retail banking industry were questioned and over 50 per cent cited the Internet and call centres as being critical to their businesses.

Deloitte argues that increased competition in the sector will force banks to offer increasingly sophisticated online and telephone banking services to hold onto customers.

John Harrison, partner and retail banking specialist at Deloitte Consulting, argued: "The changing function of the bank branch, from a full-service to a multifunctional ATM machine, is natural when most consumers are able to reach their bank easily and happily via the telephone or Internet."

In five years time, Harrison predicts, call centres will be equally as important to banking as high-street branches, and Internet services would not be far behind.

But a spokesman for the Natwest Group said: "We will not close down any branches. We see Internet banking as a luxury service that is complimentary to our branches - not a replacement."