Friday, May 29, 2020

Banks must help firms switch to modern banking methods as branches close, says FSB

Banks must do more to help small firms switch to modern banking methods as the number of bank branch closures grows, says the Federation of Small Businesses.

The call has come from the FSB’s National Chairman Mike Cherry in response to news that Santander intends to close 140 of its branches.

He said: “When a community loses a bank branch, that can have a number of impacts on local small firms: lost access to vital cash deposit and withdrawal facilities, reduced access to finance and a drop in shopper footfall.

“Of course habits are changing – more than 90 per cent of our members bank online – but lenders should do more to help consumers and small business owners transition to new banking methods. The Access to Banking Standard must be strengthened.

“There are still actions that we as small business owners have to sign-off in a branch, in-person. That includes when we’re trying to switch to more competitive account providers. Equally, we need somewhere to turn when online services fail.

“Post Offices can serve as an alternative, but services vary across locations. There’s an element of the rich getting richer when it comes to financial inclusion: areas that are well-served for bank branches often end up with the best-equipped POs.

“We need to move to a situation where we have branches that are viable for banks and customers alike. These are likely to increasingly encompass the provision of office spaces, meeting rooms, wifi lounges and workshops for local small business owners.

“The future of high streets is in mixed-use spaces that are at the heart of communities. The future of successful bank branches will likely follow the same model.

“If branches keep closing at a rate of knots, however, there could well be many high streets and town centres that end up damaged beyond repair.”

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