High Street banks are closing as many as 10 branches every week as part of extreme new cost-cutting efforts.
More than 550 branches are earmarked for closure this year, according to new research from the Mail and Which?, in a move that is set to save the banking giants millions.
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But there is concern that many customers, especially small businesses and the elderly, will suffer as a result of the changes, which will see customers driven further online.
Small business impact
Business groups are particularly worried about the impact on small firms that deal in cash, many of which could now be forced to travel miles to make deposits.
FSB head Mike Cherry said: “Our members routinely deal with customers who want to pay in cash. Once a town loses a bank branch it hurts footfall, particularly in tourist hotspots, and means business owners have to spend time travelling out of town to use banking services.”
The problem may be compounded by new rules on card transactions. As Simply Business reported, (the government is set to ban fees for credit and debit transactions)[/knowledge/articles/2017/07/debit-and-credit-card-surcharges-banned-by-2018-what-it-means-for-uk-small-businesses/], which could cause even more consumers to pay in cash.
Big Five shuttering
The ‘Big Five’ banks have shuttered nearly 3,000 branches since 2011, but the rate of closures has accelerated significantly in the last two years.
RBS/Natwest has already closed 695 branches. Lloyds/Halifax has closed 950, although two thirds of these were reopened as TSB locations.
James Daley, of consumer finance group Fairer Finance, told the Mail: “Banks have to realise they have a social responsibility as well as a responsibility to shareholders, and I think they need to hold on for longer before closing these branches.
“Bit by bit, a growing number of people are becoming financially excluded and I’m worried nobody is keeping an eye on that. I would encourage the government and regulators to look at it.”