Santander restructures UK branch network, shutting 95 locations amid digital shift

Santander has announced a major restructuring of its UK branch network, confirming the closure of 95 branches starting in June 2025. This decision reflects the rapid transformation in consumer banking habits, with customers increasingly shifting to digital banking solutions over traditional in-branch services. Santander’s revised strategy includes a focus on digital channels, mobile banking enhancements, and the introduction of Community Bankers to provide in-person financial guidance in affected areas.

Despite the closures, the bank will continue to maintain 349 branches, which will include a mix of full-service locations, counter-free branches, and reduced-hours outlets, as well as an expansion of its Work Café concept—a modern banking space that doubles as a co-working hub. The move aligns with the bank’s ongoing investment in digital tools and alternative banking models, ensuring it meets the changing needs of its customer base.

What Is Driving Santander’s Shift to Digital Banking?

Over the past decade, the banking industry has undergone a significant transformation driven by technological advancements and evolving consumer preferences. The increasing reliance on mobile banking apps, AI-driven financial assistance, and contactless payment solutions has reshaped how customers interact with their banks.

Santander’s decision to reduce its branch network follows a broader industry trend that has seen UK banks scale back physical locations due to declining in-branch activity. The bank has observed a 61% drop in financial transactions conducted in branches since 2019, while digital banking adoption has surged.

Over the same period, Santander has recorded an 82% increase in digital account openings, a 56% rise in mobile banking users, and an 89% jump in transactions completed via its mobile app. Logins to the app have grown to an annual total of 1.9 billion, highlighting the extent to which customers now prefer managing their finances online rather than visiting a physical branch.

This shift mirrors a global trend among banks, with many financial institutions balancing cost efficiency and digital accessibility. By reallocating resources to mobile banking advancements, AI-powered customer service, and user-friendly financial management tools, banks aim to enhance customer experience while maintaining operational efficiency.

How Will Community Bankers Fill the Gap Left by Branch Closures?

To address concerns about accessibility, Santander is introducing Community Bankers, a service that will provide local communities with ongoing face-to-face banking assistance. These specialists will offer money management advice, general banking support, and digital banking guidance, ensuring that customers, particularly those who are less comfortable with digital services, continue to receive in-person assistance.

Community Bankers will operate in areas affected by branch closures, visiting local communities weekly and working closely with Banking Hubs, which provide shared banking services from multiple financial institutions. The initiative is designed to bridge the gap between traditional banking services and digital banking adoption, ensuring that customers still have access to essential financial support.

What Role Do Work Cafés Play in Santander’s Future Strategy?

In addition to its Community Banker initiative, Santander is expanding its Work Café model, a concept that has been successfully implemented across its international operations. These locations serve as co-working spaces with high-speed WiFi, event areas, and financial advisory services, providing a modern banking experience that caters to both businesses and individuals.

Unlike traditional branches, Work Cafés are designed to be more than just banking hubs. They foster community engagement and collaboration, allowing customers to work remotely, hold meetings, and access financial expertise in a relaxed environment. Santander has recently opened two new Work Cafés, with plans to introduce additional locations in the near future.

How Is Santander Investing in Digital Banking?

Recognizing the growing reliance on digital banking, Santander has heavily invested in its mobile and online banking platforms. In 2024, the bank launched a new mobile banking app, which has received industry recognition, including a Digital Banker Award for Financial Inclusion. The updated app offers improved security, enhanced user experience, and AI-powered financial tools to assist customers in managing their finances efficiently.

Santander has also introduced My Home Manager, an app designed to help customers track and manage mortgage payments, property expenses, and financial planning for homeownership. The app represents the bank’s commitment to integrating digital solutions into everyday financial decision-making, allowing customers to manage their financial lives with greater ease and efficiency.

What Does This Mean for Santander Employees?

As part of the restructuring, approximately 750 employees could face potential redundancy, though the bank has stated that it will work closely with unions and affected staff to explore redeployment opportunities within the organisation. Employees impacted by the closures will receive career transition support, access to specialist job placement services, and 24-hour Employee Assistance Helpline services.

The shift away from traditional banking jobs is indicative of larger workforce changes within the financial sector, as banks increasingly invest in automation, AI-driven customer service, and digital banking solutions. While job reductions remain a challenge, many financial institutions, including Santander, are working to create new roles focused on digital banking support and advisory services.

How Are Investors Reacting to Santander’s Branch Restructuring?

Santander’s strategic shift has been met with positive investor sentiment, reflecting confidence in the bank’s ability to adapt to the digital banking landscape. As of March 20, 2025, shares of Banco Santander traded at 532.00p on the London Stock Exchange, marking a 46.96% increase over the past year.

Analyst ratings remain largely optimistic, with 18 buy recommendations and 3 hold ratings, suggesting confidence in the bank’s ability to drive profitability through cost savings and digital growth. The average 12-month price target stands at 569.44p, indicating a potential upside of 3.72%.

Adding to investor confidence, Santander has continued its share buyback programme, repurchasing 9.7 million shares between March 13 and March 19, 2025. This initiative signals the bank’s commitment to enhancing shareholder value and underscores its strong financial position.

For investors, the bank’s restructuring efforts could represent a long-term growth opportunity, particularly as digital banking adoption continues to accelerate. However, the success of Santander’s transition will depend on its ability to retain customers, navigate regulatory challenges, and balance operational costs with technological investments.

What’s Next for Santander and UK Banking?

Santander’s branch closures and shift towards digital banking and alternative in-person services mark a significant transformation in the UK banking sector. With customer preferences increasingly favouring mobile and online transactions, traditional banks must evolve their strategies to remain competitive.

By expanding its Work Cafés, Community Banker programme, and digital banking tools, Santander is positioning itself to meet the needs of a modern customer base while maintaining accessibility for those who prefer face-to-face banking services. While the transition may pose challenges, particularly for affected employees and customers accustomed to physical branches, the bank’s long-term digital-first strategy aligns with broader trends shaping the future of financial services.