A mobile branch van will stop on Tuesday for 5 minutes in the nearby village. So what?

This is the second story in the “So what?” series of stories which have either inspired my research this year or which I discovered through my research.

For the full report on measuring access to banking in the UK, go here.

Story 1. “For 70 years old, wheelchair bound Tim, the taxi ride to the bank costs 16GBP. So what?

Before starting my research into access to banking in the UK, I did not know “mobile branches” vans exist. It is fair to say that even after months of extracting branches locations thorough banks’ Open Banking APIs I did not notice them. When I did, I noticed first that they have no Sort Code, a UK specific code which identifies uniquely a banking branch within the banking system. Upon paying more attention I noticed the unusual opening times, which way too often was five minutes per week.

I obviously had questions.

Is this true? I re-run all the Open Banking API for branches focusing on identifying the mobile branches. It turns out that out of all banks in the UK, only RBS, Natwest, Lloyds Banks and Bank of Scotland have them.

What is a mobile branch? I did not come across a definition of what the mobile branch should do as a channel so here is my attempt to a definition.

A mobile branch is a van, driven by a dedicated driver without banking attributions, carrying a banking clerk, some banking equipment allowing the execution of a limited set of banking transactions (i.e. cash withdrawals, cash deposits, coins exchange, payments, checks acceptance, etc.) for a dedicated banking brand (i.e. RBS, LBG, etc). The van has an established schedule, communicated as a pdf document on both online and mobile platforms of the banks. We could not identify if the banks established any mechanisms for notifying their customers for significant disruption of schedule of the vans. As vans design does not allow the installation of ramps, they are not accessible to wheelchair bound people or to those who cannot climb a few stairs.

A mobile branch looks like this:

What services would a customer get in a mobile branch van? The services offered through a mobile branch van differ from bank to bank [1] but most importantly they differ from those available in a “physical” branch. As mobile branches are mainly used for cash deposits, withdrawals of larger sums of money or coin exchanges, they are particularly relevant for small businesses in areas operating mainly a cash economy. Even these services are limited though. LBG has a deposit limit of £5000 and RBS of £3000 in its mobile branches. Cash withdrawals are limited to £500 daily in a LBG mobile branch or £1500 if pre-ordered 48 hours in advance. RBS has higher limits of £1500 and £3000 for cash withdrawals for business banking, the later with prior arrangement “with the mobile branch in person”. Additionally, all the transactions executed in a mobile branch van, are visible in the customer’s account with at least one day delay. There are further limitations to what services are available from one stop of the branch van to the next, depending on the WiFi coverage of the area. Operations like opening accounts, mortgages, loans, CHAPS payments, traditionally associated with banking in a branch, are not available at all.

In short, the services offered in a mobile branch van:

  • May require 24 to 48h advance notice to the van in order to be performed
  • Have lower limits in terms of transaction value
  • Are reflected with delay in the customer’s account.

How many mobile branches are there? In February 2019, according to the data provided by banks through the Open Banking APIs, there were a total of 1593 mobile branches “stops” in the UK. We do not know the number of vans as the APIs count the stop of a van as a “mobile branch”. Out of these, 939 belong to Royal Bank of Scotland, 432 to Natwest, 114 to Lloyds Bank and 108 to Bank of Scotland.

Where? Mobile branches are mainly a Scottish phenomenon however, in smaller numbers we can find them also in England and Wales. The images below show the mobile branches and physical banking locations of two large UK banks. The comparison shows two very different channel strategies of these two banks. One seems to use mobile branches to complement its current physical structure while the other sees them as a replacement. Can you guess the brand of these two banks?

What is the capacity of a mobile branch? Mobile branches have limitations not only in terms of service range but mainly in terms of opening times. How limited could the service be, you’d ask. To which I give you the response I get from the APIs: between 5 minutes and a few hours per week. Actually, this is my guess that the opening times are per week as the API cannot cope with opening times which are not within a weekly frequency. Maybe they stop for 5 mins every two weeks for what I know.

I invite you to do the following very simple mental exercise. If a typical physical branch is open 46.5h per week and we equate this to a capacity of 1, what is the capacity of a mobile branch? That would be the number of minutes the van stops in a place, divided by 46.5h. The figure above shows in dark purple that many mobile branches have a capacity close to zero.

What else? It is not a trend only for physical a.k.a. fixed location banking branches to be replaced with mobile branches vans stopping for a short period of time. The same trend appeared for post offices too, the glorified replacements of banking branches. Post offices close too and the number of “outreach post offices” is growing. Some of these “outreach offices” are mobile some are temporary locations in public buildings like libraries, pubs and village halls. The process is even less transparent than for banks as the Post Office does not have an API to provide this information akin to large banks. According to the latest report of the Post Office Ltd for the 2019[2], there are 1633 outreach post offices in the UK out of a total of 11638 overall.

So what?

  1. The limited service range, (extremely) reduced opening times and unreliability of the schedule indicate that the mobile branches should not be considered a replacement for the physical branches but only an additional service for very specific conditions.
  2. The lack of a dynamic schedule information akin to public transport information, makes people’s lives quite difficult as many end up travelling for many miles just to wait in a parking lot for a van that does not turn up and they have no way of knowing if the situation will not repeat the following week. Twitter abounds of such complaints.

Tech:

  • the Open Banking APIs for branches for the banks with mobile branches are below:
  1. LBG:https://api.lloydsbank.com/open-banking/v2.2/branches
  2. BOS: https://api.bankofscotland.co.uk/open-banking/v2.2/branches
  3. RBS:https://openapi.rbs.co.uk/open-banking/v2.2/branches
  4. Natwest: https://openapi.natwest.com/open-banking/v2.2/branches
  • the code for accessing the APIs and reproducing the figures will be published next week here.

Footnotes:

[1] For a complete list of services check here for LBG, here for RBS and here for Natwest. There is no description of the services provided by the mobile branches of Bank of Scotland.

[2] J. Brown, L. Booth, ‘Post office numbers’, May 2019.

Banking Systems Architect. Curious. Antifragile.

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