What is the correct number of bank branches?

Lawyers are advised never to ask a question they don’t already know the answer to. We’re not lawyers so we can break this stricture with impunity and admit that we’ve absolutely no idea at all how many bank branches there should be across this green and pleasant land. We are certain how we find out, but the number is unknown to us.

Britain’s leading consumer group has called on banks to justify nearly 13,000 bank branch closures that have left millions of people struggling to access vital financial services across the UK.

Figures compiled by the consumer charity Which? show that the UK has lost nearly two-thirds of its bank and building society branches over the past 30 years, from 20,583 in 1988 to 7,586 today.

The loss of those sites has left 19% of the population more than nearly two miles away from their nearest branch, while 8% now have to travel more than three miles, with Scottish communities hardest hit by closures.

Which? obviously has in mind some level of service, or geographic distinction perhaps, which should determine that number. Our method is somewhat different.

How many bank branches are people willing to pay for? For quite obviously it is the people who use banks who pay for there to be banks to use. We’re not into the idea that we out here should be paying for other, perhaps richer, people to have somewhere safe to keep their money.

Once we’ve got that settled then the answer emerges. It costs money to keep a branch open, there’re rents, wages, rates to pay. If insufficient people use the branch to cover those costs then the branch should not be there. Expending more resources to produce something which is worth less than those resources used is a great way to make the society in general poorer.

So, how may bank branches should there be? Whatever number it is profitable to provide. Something that will change as technology does, as the society around the banking system does.

Seriously, how else could we possibly work this out?