Banks: from high street to hi tech

Melanie Bien asks whether banks on wheels and digital TV are alternatives to the high street

The tiny village of St Tudy, near Wadebridge in Cornwall - population 635 - finds itself in good company this weekend as it is one of a growing number of rural communities without a local bank branch.

The elderly population of St Tudy is used to this state of affairs, however. Unlike those communities hit by the closure of 172 Barclays branches on Friday, the village has never been considered big enough to warrant a local bank branch. To visit the nearest bank, residents must catch the bus for a 14-mile round trip to Bodmin, the nearest town.

Yet locals carry out their banking transactions without leaving the village. Once a week they clamber aboard the HSBC mobile branch, a lorry which parks under the village's biggest chestnut tree. Once aboard, customers can withdraw cash, pay in cheques or arrange a mortgage.

There are five mobile HSBC banks which visit Lincoln, Grantham, Northampton and Wadebridge, each serving 150 customers a day. Staffed by just three people including the driver - who doubles up as a cashier - they are one solution to the problem of vanishing rural bank branches.

The Campaign for Community Banking (CCB) says around 4,000 branches have closed in the past 10 years. Lloyds TSB has shut 568 since 1995, NatWest is closing 60 from May (bringing its total to 574 over the past five years), while Barclays has closed 671 branches since 1990. HSBC is the only one of the big four to have refrained from sweeping closures.

"This is corporate greed overtaking social responsibility," says Derek French of the CCB. As banks withdraw from communities, the future of local shopkeepers and businesses is also threatened because customers tend to spend their money where they draw it out.

Barclays argues that banking is an intensely competitive industry so it is closing unprofitable branches. But with so much talk of shareholder profits and directors' bonuses, those who are really going to suffer are forgotten. If your local branch closes, it is frustrating and inconvenient. Only a few lucky people can call at a mobile HSBC branch.

After protests, Barclays is finalising a deal with the Post Office that will offer some service in country areas. Within three weeks, there should be arrangements in place to let customers cash cheques, and pay in and withdraw money, extending a trial begun in Cornwall.

The growing popularity of banking by digital television, mobile, PC, internet and the phone means it should be possible to bank without a branch. But how do you go about it?

The best home banking lets you do everything apart from pay in cheques and withdraw cash. Most banks allow you to carry out transactions via the telephone. If you want "human" contact rather than an automated system, you'll usually have a choice. You will be guided through a number of security checks before choosing a service like requesting your balance or paying a bill.

Phone banking is quick and simple to use, letting customers access their accounts day or night, seven days a week. The only disadvantage is that you don't have direct control over your account as you have to go through a third party.

If you want more flexibility and have a computer and a modem, you can bank via your PC. You don't need access to the internet either; your bank supplies you with a CD-Rom, and you dial direct to the bank's computer through your modem and access your account.

PC banking can be restrictive as you can only access your account via your own computer. For added flexibility you need an internet service provider (ISP) that allows you to get on to the net. Most high-street banks have good online banking facilities that are popular with customers. Barclays, for example, has more than 700,000 online customers. You access your account via your bank's website: once you have completed the security checks, you can view your account details and carry out a range of transactions from paying bills to transferring money.

If you want better rates of interest, it may be worth opening an internet-only bank account. Egg, Smile and First-e offer accounts with better rates than the high street, but Egg charges £2 a time if you ring with an account query. Smile is the only one of the three offering a current account.

The cost of internet banking depends on your ISP and the telephone company you use. Phone banking works out cheaper as it tends to be much quicker. Most banks charge local rates for phone calls, with one or two, such as Citibank and Fleming Premier Banking, offering free phone calls.

New developments make home banking even more attractive. Do you fancy banking while watching TV? HSBC launched its interactive digital TV banking service last year, allowing customers to do almost as much as with PC banking. Most digital TV banking is limited so far, but Woolwich and Abbey National launch services later this year.

Mobile phone banking is expected to be popular too. "Wireless applications protocol" (WAP) mobile phones let you access your bank account to transfer money and pay bills. Woolwich and NatWest offer this service.

But customers still face the problem of withdrawing cash. There are alternatives to the traditional ATM, with supermarkets offering cashback facilities. Scottish & Newcastle pubs also offer cashback. It's worth using your credit or debit card as often as possible to cut back on the need for cash, and take out more money when you visit a cashpoint.