An exploratory spatial analysis of access to physical and digital retail banking channels in the UK

A TFI research project by Andra Sonea, Weisi Guo, and Stephen Jarvis
Posted on October 24, 2019

“An exploratory spatial analysis of access to physical and digital retail banking channels” is one of the short-term research projects supported by the Think Forward Initiative.

A good financial infrastructure is just as important as public transportation or energy; all are needed for a comfortable daily life. Being excluded from this infrastructure of financial services (be it physically or digitally) can have important consequences for people’s financial lives. In this study, Andra Sonea, Weisi Guo, and Stephen Jarvis (University of Warwick) created an infrastructure map of the points of access to financial services in the UK. In which areas are people particularly vulnerable to financial exclusion? And how can we prevent this? Download the full report or read the summary below to find out!


The question of “access” to financial services in developed countries has generally been addressed as a matter of “financial exclusion” within the framework of economical and regional development. Typically, a small percentage of the population falls in the “financially excluded” category. It was often considered that this exclusion stems from various forms of self-exclusion, or from an inaccessibility to more complex products due to price or banks’ risk assessments.

But perhaps another reason for this exclusion may be more straightforward. In this study, we take a look at the phenomenon of “geographical exclusion” as a growing phenomenon in the developed world. Kempson, Whyley, Caskey, & Collard (2000) and Beck & de la Torre (2006) defined the “geographic exclusion” component of the financial exclusion as “the absence of bank branches or delivery points”. Nowadays, this definition needs to be extended with the digital delivery of financial services.

After all, digital banking also has a geographical component: accessing digital banking depends on the availability and quality of fixed and mobile broadband in the area. Furthermore, just like assessing access to public transportation, green spaces or supermarkets, “access” to financial service channels gives us additional information about the quality of life of the communities living in a certain area. An individual could experience the access to physical or digital banking channels very differently, depending on his place of residence or socio-economic characteristics.

Physical ability or capability issues matter

In this study, we took a spatial, customer centric approach in order to assess the degree to which local financial infrastructure in the UK allows citizens access to their own bank account in a cash or digital form. We wanted to discover where the “geographic exclusion” does indeed exist in the most extreme form, and to characterise what parameters evince this “void” from the point of view of access to both physical and digital channels. We borrowed the terminology from the Financial Conduct Authority in the UK, which described it as a situation where “customers can get ‘stuck’ or ‘blocked’ from accessing financial products and services because of physical ability or capability issues.”

In this context, we considered ATMs, banks and post offices as physical points of access to financial services. We calculated the distances from the centroids of 42,148 small statistical areas in the UK to the closest and second closest point of physical financial infrastructure, calling them Distance 1 and Distance 2 respectively.

Figure 4: Calculation of the minimum distance from the centroid of a statistical area to a point of physical retail banking channel (Distance 1).
Figure 1: Calculation of the minimum distance from the centroid of a statistical area to a point of physical retail banking channel (Distance 1).

We then calculated for all small statistical areas the difference between these two distances. When this difference is bigger than 5,000m, we considered that these areas show a high vulnerability to the closure of the point of access (ATM, branch, post office) identified as the closest. We called this difference Impact Index, and we graded the impact based on the thresholds measured in meters:

Table 1: Thresholds for measuring impact of closure of a point of physical retail banking infrastructure.
Table 1: Thresholds for measuring impact of closure of a point of physical retail banking infrastructure

The spatial analysis of these indicators of access showed that the distribution of the ATMs, branches and post offices is strongly clustered in the UK. Apart from a distinct urban/rural pattern – which was to be expected – we observed a North/South divide akin to that observed by Arcaute et al. (2016). We will further explore this possible North/South divide in another study.

Scotland appears as an outlier compared to England, Wales and Northern Ireland: it is the only country where a significant number of areas in the lower quantile have the closest access point at more than 10km distance, and the second closest at more than 15km. Such big distances could most likely be explained by Scotland’s mountainous geography and its large number of islands. Necessarily, the real distances measured on the street network are even longer than these distances measured in straight-line, implying further isolation from financial service access points.

We looked at all UK areas where the closest point of access is at a distance bigger than 5,000m. This is an important threshold in the UK as the Post Office uses approximately the same distance (3 miles) for assessing its territorial coverage. The analysis showed that post offices are the most common “closest” point for these areas, which underlines the importance of this channel for serving “the last mile”. No significant association was found between distance metrics and income and employment. The regional analysis showed that the Impact Index and the local indicators for spatial analysis (LISA) for Distance 2 can be used to proactively identify areas which are vulnerable to closures of specific points of access.

“The Void”: small-scale but clearly identifiable

We also explored a combination of thresholds of access for both physical and digital channels. For approximating access to digital channels, we used two indicators. The first is the percentage of premises which cannot get fixed broadband over 2Mbs. The second is a categorisation of the small statistical areas in England based on the telecom infrastructure present. We learned that in areas like the one studied, “the Void” (an extreme situation of lack of access) is a small-scale, isolated and clearly identifiable phenomenon. What exacerbates the situations of reduced access are the socio-economic characteristics of the population affected. Those economically vulnerable (for instance with reduced mobility, and/or depending on benefits) would be affected the most.

We built a set of UK dynamic maps for physical points of access to retail banking which we intend to maintain and make openly available. This map shows all the physical bank branches and Post Offices open in UK in July 2019 as well as the branches closed between February and July 2019. Click and un-click the legend items to select the categories you would like to display or search for the closed branches with Impact Index 4.

As it turns out, the majority of the endpoints of access to banking in the UK are not owned or operated by banks. Given that finance is considered as one of the thirteen sectors of National Critical Infrastructure, it is important that we can model it, much like other critical infrastructures. Modelling it will help greatly to ascertain its robustness and resilience parameters. What does the closure of post offices entail for access to retail banking? What is the impact of a regional outage of the telecom infrastructure? Such questions can only be quantitatively answered if one comprehensively models the infrastructure on which finance depends.

Recommendation: dynamic mapping needed!

To be able to model financial infrastructure, more accurate data is crucial. We therefore recommend more transparency for retail banking players and the telecom industry regarding the data points required for measuring access. The regulators should review the purpose of having APIs for branches and ATMs for a small set of banks if the infrastructure landscape cannot be fully represented. Before closing an access point, the industry should do a quantitative assessment of access of the area in question, using the indicators discussed in our study.

The degree to which the mobile branches and outreach post offices satisfy the retail banking needs of the communities impacted deserves further study. They are points of access with significantly reduced capacity and capability. The capacity of a point is defined as the time the point is open per week, while the capability is the range of services available. These are dimensions which need to be included in the future definitions of access.

We support the Ceeney Review recommendations for the access points to retail banking to be treated as a “joined-up” system. Without complete, accurate information, different players may withdraw from the same areas unknowingly, leading to a large regional impact for the communities affected. As Natalie Ceeney warned in her review: “Once [the] infrastructure had gone, putting it back was close to impossible.”


  • Arcaute, E., Molinero, C., Hatna, E., Murcio, R., Vargas-Ruiz, C., Masucci, A. P., & Batty, M. (2016). Cities and regions in Britain through hierarchical percolation. Royal Society Open Science, 3(4), 150691.
  • Beck, T., & de la Torre, A. (2006). The basic analytics of access to financial services. The World Bank.
  • Ceeney, N. (2019). Access to Cash Review. Retrieved from
  • Kempson, E., Whyley, C., Caskey, J., & Collard, S. (2000). In or out? Financial exclusion: A literature and research review. Financial Services Authority.