Marks and Spencer bank will close all current accounts as well as shutting 29 branches located inside stores.
The retailer, which has around three million banking customers across the UK, said the move was a result of a surge in online banking.
M&S Bank said it will start contacting current account customers, making them aware of the changes and their options which are expected to be completed by Summer.
This will include switching to another lender using the seven-day Current Account Switch Service or closing their account completely.
Either way, all accounts will be shut in August - or sooner if the customer has a zero balance. Overdraft charges and outstanding fees must still be repaid.
The company said in-store travel money counters, which are located in over 100 M&S branches, are unaffected.
Search for property for sale or for rent near you
It did not say how many workers would be affected as a result of the closures, however a spokeswoman confirmed staff have today entered consultation.
The chain is expected to focus on more digitally-facing products and services, such as credit cards and rewards, with plans to merge with its Sparks card.
However, it will continue to offer its existing range of general insurance, savings and loan products.
Paul Spencer, CEO, M&S Bank, said: "As we adapt to meet the changing needs of our customers, and we deliver some new - more digitally-focused products and services – it does regrettably mean we will move away from branch-based servicing and the 29-in-store bank branches and associated current account will close this summer.
"We're now firmly focused on supporting both our customers and colleagues through this change, and the delivery of our transformation plans, which will create new and rewarding payment solutions for M&S shoppers, both in-store and online."
"Kirsty Ward, director of bank and services, at M&S, said: "M&S was an early pioneer in retail financial services, and the rapid transformation in how we spend, borrow, save and protect has never been more exciting.
"We are striving to bring our customers the very best financial products that meet their needs today and in the future - and our priority, as set out today, is making it even easier and more rewarding to buy the things they love from us."
