British banking group Lloyds is set to reduce the size of hundreds of its branches in response to increasing adoption by digital banking channels by customers.

The bank now plans to launch micro branches, which will house by as low as two employees equipped with tablets.

These branches will have no counters and customers will conduct transactions through self-service machines and talk to mortgage advisers through video links.

The bank also plans to launch 20 large flagship branches in city centres to provide a broad range of services, including for businesses. In addition, plans are on to launch new mobile branches operating out of vans.

“Branches are a vital part of our strategy, and we’re investing in our network to make sure it’s right for the future. We’re transforming branches, responding to customers and giving them choice, including new flagship branches in city centre locations, and introducing some smaller micro-formats alongside our community and mobile branches,” a bank spokesperson said.