What Is High Street Bank?

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The High Street in the UK is similar to the Main Street in the United States. Therefore, the term ‘High Street bank’ denotes a commercial bank in an economically significant and busy country. Some reputed High Street banks in the UK include Barclays, HSBC, NatWest, etc.

Key Takeaways

  • A High Street bank is an established retail bank that mostly serves individuals and small-sized businesses rather than large firms.Though essentially a British concept due to their presence in the High Street of the UK, it can mean any reputed banking institution serving mostly consumers.It functions like a normal commercial bank, offers loans, accepts deposits, and provides online banking services.However, these banks are now facing serious challenges from online banks or neobanks, which eliminate the need for customers to visit traditional brick-and-mortar institutions.

High Street Bank Explained

High street bank meaning describes banks usually established in busy areas of a country and receive high footfall. The High Street in the UK can be compared to the Main Street in the United States, unlike Wall Street. Main Street has much retail banking, whereas Wall Street houses many investment banks.  Retail bank offerings from a high street bank include credit facilities, bank deposits, mortgages, personal loans, education loans, credit and debit cards, and internet banking options. Since the offerings of these banks are attractive and favorable to consumers, they are encouraged to open high street bank accounts.  With this in mind, it is important to understand the competition these banks face from neobanks today, which are purely digital and have no traditional branches. All the services are online with neobanks. Even though the retail banks offer 24×7 online services, it is no match for the online banking experience provided by Neobanks. Also, they can offer higher interest rates on bank deposits due to reduced overheads and the absence of a physical setup.

Features

Now let’s discuss some important features of banks in the High Street:

  1. Retail banks – Banks in the high street banks are retail lending institutions. That is, they mostly cater to individuals rather than companies. However, some banks also provide services to small businesses.2. Well-established – Most retail banks are widespread, having many branches in a certain region or worldwide. For example, HSBC has around 7500 branches worldwide.3. Works like a normal bank – Banks in the High Street provide normal banking services to consumers like deposits, loans, credit/debit cards, internet banking, cash withdrawal, bank transfer services, etc. However, some of the best high street banks, like HSBC, Barclays, NatWest, etc., have expanded their services and are no longer confined to retail banking. They offer investment banking services, which include portfolio and asset management, financial advice, etc. Further, they provide credit facilities to large corporations. 

Examples

Consider the following high street bank examples to get a better understanding:

Example #1

Let’s look at the case of Barclays, one of the prominent High Street banks in the UK. Barclays has around 4750 branches in 55 countries worldwide. Apart from being a retail bank, it provides various financial services like trading, risk and portfolio management, impact investing, wealth management, and even business banking services. 

Recently, Barclays acquired the British mortgage lender Kensington Mortgage Company for $2.8 million. Also, it is seeking to enter China’s $4.3 trillion asset management market. These recent ventures of Barclays show that the retail bank is trying to seep into the local and foreign markets.

Example #2

As inflation rises, many consumers start shifting their private banks for various reasons. For example, in April 2022, when the inflation started moving upwards, around 27% of customers moved a part of their money from their primary retail banks to other such banks. Some of the reasons for this transition include easier payment of bills from the second bank, lower fees, better interest rates on deposits, cash backs, and rewards. 

Experts say that this transition has occurred since people have realized that their salaries cannot keep up with the inflation and that moving money to a better account will enable them to grow their money somehow. Also, research shows that this trend is more visible in people under 40.

This article is a guide to What is High Street Bank. Here, we explain its meaning and features with examples. You can also go through our recommended articles on corporate finance –

Many retail banks are offering various services. Hence, it would be difficult to name one as the best. Therefore, any individual should first research the offerings of different banks and find the one for them. However, some of the reputed banks in the High Street are Barclays, Lloyds Bank, HSBC, NatWest, etc.

Since banks on the High Street help individuals by offering personal loans and mortgages, they also offer education loans at reasonable interest rates to support the student community. Apart from the credit, some banks advise students on managing their finances, which will help them make the best out of the money available.

There are many retail banks in the UK. However, some prominent British banks are Barclays, Lloyds Bank, Metro Bank, and NatWest.

  • Financial InstitutionsMobile BankingBanks in the United Kingdom