The ongoing closures of local bank branches are presenting “tough challenges” for the UK’s small-and-medium-sized enterprises (SMEs). This is according to a new report from the Federation of Small Businesses (FSB), which revealed that smaller firms are increasingly missing out on important face-to-face interaction with banking staff. Is this a problem that’s set to get worse, or can SMEs overcome the hurdles of online banking?
FSB concerned about "rapid pace" of closures
The FSB found in its report ‘Locked out: The impact of bank closures on small businesses’, that the number of Britain’s bank branches has fallen by 50% to just over 8,000 in the last 25 years. Some experts have predicted this figure will halve again during the 2020s, as the impact of advanced technology takes hold.
The Federation’s National Chairman Mike Cherry said the “rapid pace” of the closures “presents some very real and tough challenges for small businesses” – for example, not having the human interaction needed while overseeing more complex transactions.
“Staff…often have a greater understanding of their business and the local economy”, Mr Cherry added. “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.”
The issues facing SMEs
Indeed, cash remains a popular payment method for customers of many small companies. But, the FSB found that if these businesses don't have easy access to cash clearing facilities at the end of the day, problems can occur.
Further, if customers aren’t able to access cash, SMEs may not have the takings in the first place – and even if ATMs are present, they’re not always reliable. The FSB discovered that during busy periods, cashpoints in small towns and villages can run out of money altogether.
Some firms don’t just rely on cash for convenience, but because it’s cheaper. Those that invest in card machines have to pay the merchant provider for each transaction – something that eats into revenues over time. Payment terminals also rely on solid internet connections, which aren’t always available in rural locations.
If you’re an SME owner who’s concerned about the impact of bank branch closures, contact Dukes Bailiffs to find out how ethical debt recovery services can limit the impact of these changes on your cash flow.