HIGH-STREET banks are failing small firms, the Federation of Small Businesses (FSB) has said.
Branch closures mean that less tech-savvy business owners cannot access banking, the industry body has claimed in a new report released on Monday.
“Small businesses are keen to embrace the opportunities of the digital economy – 94 per cent of small businesses already use internet banking,” said Mike Cherry, FSB national chairman.
“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.”
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 10 years.
The FSB’s argument that small businesses need bricks-and-mortar branches to service their finance needs is likely to be contested by the peer-to-peer finance industry, which is largely online. Funding Circle is the third largest lender to UK small businesses despite not having a high-street presence.
Do you agree with the FSB that small businesses need bricks-and-mortar branches to make financial transactions? Do you think the P2P sector should move into the high street? Have your say by emailing firstname.lastname@example.org.