Fresh bank branch closures announced by Royal Bank of Scotland (RBS) risk wiping out access to vital one-to-one financial support for Britain’s small firms, the Federation of Small Businesses (FSB) has warned.
After the bailed-out lender confirmed the closure of 62 RBS and 197 NatWest branches – a quarter of its entire network – the bank’s chief executive, Ross McEwan, pointed to the rise of mobile banking in leading to an online-first strategy.
However, FSB chairman Mike Cherry rejected the notion that online services could eventually meet every banking need of Britain’s entrepreneurs.
“Almost all of our members are using online banking. However, small firms still hugely value the in-person support they receive at branches, particularly when it comes to completing complex transactions and making big financial decisions. For many, these are relationships that have built up over years,” Cherry explained.
The latest wave of RBS closures followed Barclays’ confirmation in August that it will close 54 branches this month. The rise in bank closures has seen Britain’s network of branches halve in the last 25 years to just 8,000, and a further 50 per cent is predicted in the next ten years.
Read more about how bank branch closures are affecting small firms:
- RBS and NatWest announce more than 150 UK bank branch closures
- HSBC ends restructuring with swathe of UK branch closures
- Small business owners braced for further 54 Barclays branch closures
Business owners operating in rural areas in particular, where communities often suffer from a shortage of physical cash, could suffer most from further restricted access to financial services. The internet connectivity vital to effective online banking is also limited in such areas.
“In areas of the country still blighted by poor broadband, accessing online banking is a challenge. What’s critical is that small business owners that rely on bank branches are provided with suitable alternatives well before closures happen,” Cherry said.
“Access to cash is a big issue here. Cash is still critical to trade in thousands of our towns and villages, especially in tourist hotspots and rural areas. More and more small firms are accepting card payments but that comes with costs they’re forced to absorb. Equally, many have customers that only deal in cash.”
Cherry also referenced plans put forward by the LINK network of free ATMs that could see the closure of many free-to-use cash machines across the country.
He added: “What we can’t have is banks shutting branches on a whim, especially at a time when plans are afoot that may diminish our cash machine network in future.”
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