Bank branch closures bad news for small business

News 22 Feb 2018

Access to cash is causing big problems for small businesses

Over the past five years RBS has closed or is scheduled to close 70% of its branch network. However RBS are not the only big bank closing their doors up and down the country, a third of Scotland’s total bank branch network has closed over the same period.

The announcement of such a large number of closures has sparked outrage from businesses and communities. Despite how often the banks tell you otherwise, Scotland as a whole, and especially more rural areas, is still a cash-based economy. Small businesses need branches for vital services, like depositing cash, which no matter how fancy a bank’s app may be this is something that requires a branch, especially if you live in an area where poor broadband makes accessing an app that bit more difficult. 

Of course banks aren’t the only option – there are also mobile banks and post offices – but for a whole variety of reasons, mobile banks don’t cut it for small businesses. FSB members often cite security as a major drawback to the use of mobile banks. Standing outside a mobile bank with a wad of cash to deposit certainly doesn’t sound like the safest way to do your business banking. 

Equally, while providing what is in many ways an excellent service, post offices are not banks and cannot satisfy all needs in all circumstances. Both of these options, as well as travelling to a branch in another area, pull our members out of their businesses. Every minute waiting in line at the post office or mobile bank or driving miles to the nearest branch, is a minute that our members are not working in their business. 

The extent of the closures can be seen in our interactive maps, detailing both the RBS and other bank closures since 2016. The maps show that this isn’t just a rural issue, banks are disappearing from cities and urban areas as well.  However there are no official up-to-date figures on closures, planned closures and what’s left.  This is simply not good enough, some investigation into the scale and the economic impact of these closures and reliable data on what remains needs to be undertaken. 

RBS have made some concessions and have halted but not cancelled the closure of 10rural branches in Scotland, and whilst we welcome this decision, there are still another 52 branches slated for closure this year. Delaying the fate of 10 does not look like the change of heart we or indeed communities across the country were looking for.

As part of their announcement on halting some bank branch closures RBS have also promised not to remove their ATMs if they are the last one in town. However free ATMs across the country, may be under threat if the changes to charging proposed by the LINK network go ahead. As cashpoints often serve as key alternatives to bank branches, closures of ATMs will make things even harder. FSB has joined forces with the UK’s largest consumer association Which? for the #SaveOurCashMachines which will ask The Payment Systems Regulator to guarantee that consumers can easily access cash without charge. Get involved with the campaign at  

Laura McKelvie is the policy and public affairs assistant for the FSB in Scotland