Lending

Banks promise to compensate for branch closures

Praseeda Nair | 10 November 2016 | 8 years ago

Bank branch closures
The Federation of Small Businesses have previously reported that 8, 000 banks have closed in the last 25 years
The British Bankers Association (BBA) has promised to provide greater support for customers and businesses that face local bank branch closures, following a review into the practices of major lenders.

The recommendations come as part of a new report from Professor Russel Griggs the BBA’s external reviewer into appeals and processes that reviewed the Access to Banking Protocol of the BBA. The protocol was written in May 2015 to outline the responsibilities of banks following branch closures in the UK.

Griggs’ conducted a 12 month review to assess whetherbanks had operated within the recommendedpractices.

The BBA the leading trade association of the UK banking sector has pledged to incorporate the report’s recommendations into its guidelines. Banks that signed up to the protocol in May 2015 include Barclays, HSBC and Santander.

The key finding from Griggs? report was that UK banks could ‘significantly improve? communication and engagement in response to local branch closures, and support customers in finding alternatives.

The report also pushed banks to collaborate with local Post Offices in order to compensate for the in-branch services lost to business customers.

In a statement, Mike Cherry, national chairman of the Federation of Small Businesses (FSB), announced his organisation’s support for the recommendations, and called on all major banks to implement the reforms quickly and in full.

“The Griggs review shows beyond doubt that urgent action is required to tackle the plight of small businesses being affected by local bank branch closures

griggs echoed FSB calls for banks to do more with local Post Office branches to make sure they offer the right services for small business customers, before signposting customers to such alternatives, he said.

Another of the report’s recommendations was to develop better cash collection services for business customers an initiative that Cherry highlighted as being of particular importance in rural areas.

In the report, Griggs stressed the challenge? of small businesses that ‘still have a lot of business done in cash or cheques.

He suggested that banks had been reluctant to acknowledge the increased difficulty in paying-in physical cash if local branches had closed. The report highlighted issues of ‘security and privacy? with the Post Office in providing an effective alternative.

Griggs wrote in the report that the majority of businesses would be satisfied? if banks addressed the cash flow issue of getting payments into business accounts on time.

The reviewconcluded that banks should collaborate and offer a generic? cash pick-up service for businesses across the country and provide a range of options? for customers to use.

Anthony Browne, chief executive of the BBA, conceded that a consumer-led digital revolution? had changed the way that people access their banking, but acknowledged the significance of in-store branches to many customers.

banks are very aware no customer or business should be left behind and branches play an important role in the life of local communities, he said in a statement.

Browne assured business customers that the recommendations of the report would be taken seriously by banks.

the sector has moved swiftly to agree to update the guidelines and in doing so offer even greater support and advice to customers, he added.

According to a recent FSB report into the impact of bank branch closures on small businesses, some 8, 000 banks have closed in the last 25 years with a further 50 per cent cut predicted in the next ten years.

The alternative funding options you might not know about as a small business.

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Lending

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