News Burst: Northern Rock moves online, sheds jobs

Mounting pressure on banks as lower-cost online rivals proliferate

Another high-street bank makes the transition to the Net Tuesday as Newcastle-based Northern Rock shuts 29 branches and axes 250 jobs.

Northern Bank intends to concentrate its efforts on developing its Internet banking facilities, with lending, insurance and mortgage applications moving online. There is mounting pressure on traditional banks as Internet-only banks like Smile.co.uk, Egg and first-e persuade more customers to do their banking online. Barclays announced it is to close 200 branches, possibly in favour of its online resources.

A spokesman for Northern Rock denies the decision to expand its e-commerce offering was a response to the threat of the Net. "We are responding to the changing needs of our customers," he said.

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