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17 October 2016

Small firms locked out and let down by local bank branch closures

 

The Federation of Small Businesses has found that high-street banks in the UK are failing small businesses as their branch closure programmes continue to accelerate. In the last 25 years, the total size of the branch network has halved to just over 8,000 branches and is set to halve again in the next ten years.

Our 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

Mike Cherry, FSB National Chairman, said“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.

“Small businesses are keen to embrace the opportunities of the digital economy - 94 per cent of small businesses [3] 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.

FSB is calling on Government and the banking sector to improve small business awareness and confidence in the Access to Banking Protocol. The Protocol, put in place in March 2015, was designed to ensure that customers were offered alternative ways of banking in their local area, should a branch close down. A series of UK-wide small business focus groups organised by FSB revealed extremely limited awareness of the Protocol. We look forward to the outcome of the independent review into the Protocol announced in March by Professor Russell Griggs OBE and due out before the end of the year.

See how FSB have campaigned on this issue

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