The Federation of Small Businesses (FSB) has found that high-street banks in the UK are failing small businesses, with branch closure programmes continuing to accelerate. In the past 25 years the total size of the branch network has halved to just over 8,000 branches and is set to halve again over the next ten years.
FSB's new report, “Locked out: The impact of bank branch closures on small businesses” sets out the serious implications of this trend and finds that small business access to banking and productivity is already being damaged.
Phil McCabe, FSB development manager for Merseyside, West Cheshire and Wigan, said: “Local bank branches are closing at an alarming rate - this presents some very real challenges for small businesses.
“FSB members highly value the face-to-face interaction they receive in-branch, particularly when making complex financial transactions, with staff who often have a greater understanding of their business and the local economy. In addition, many of our members deal heavily in cash and cheques and need access to over-the-counter banking facilities on a regular basis.
“Small businesses are keen to embrace the opportunities of the digital economy - 94 per cent of small businesses [2] already use internet banking. However, barriers towards digital inclusion, such as unreliable broadband connectivity, and a lack of confidence in using digital services creates serious challenges. These are some of the reasons which explain why the protection of in-branch banking is so important for financial inclusion.
“We believe there is a sensible middle way. Our research highlights as good practice, those banks incorporating new technology in-branch, in order to both develop their digital offerings and better meet customer needs.”
FSB: Bank branch closures - small firms locked out and let down
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