Small business owners face “tough challenges” due to the rapid pace of local bank branch closures, according to the Federation of Small Businesses (FSB).
Its research published this week, has found that small businesses across the UK continue to rely on bank branches for services where face-to-face interaction is not easily replicated by alternative communication, such as online or mobile banking.
But these customers have been “let down” by local bank branch closures. The Federation says that in the last 25 years, the number of bank branches has halved to just over 8,000 and is set to halve again in the next ten years.
Mike Cherry, FSB national chairman, says: “The rapid pace of bank branch closures across the UK presents some very real and tough 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.”
Mr Cherry adds that while small businesses are “keen” to embrace the digital economy, unreliable broadband and a lack of confidence in using digital services creates “serious challenges”.
As a result, the FSB is calling for a number of improvements to be made, including extending the 12-week minimum period in which banks must notify customers before a branch is closed to 24 weeks.
It also wants the government and the banking sector to improve small business awareness and confidence in the ‘Access to Banking Protocol’, which is designed to ensure customers are offered alternative ways of banking in their local area should a branch close down.