How Will Local Bank Branch Closures Impact Small Business?
This is a question which should only be relevant to micro businesses. The entrepreneur needs to analyse what he/she needs the branch for.
Surely it is for two things;
1) To deposit funds
2) To withdraw cash
Very little these days is transacted in the branch.
At times the banks are shutting one branch one day a week and then across 5 branches they can release one team. As surely only 4 teams are required to man the branch rather than 5. This means that they have to train the customer to arrive at the branch to transact their business on the relevant days that the branch is open.
Not only can the smaller cash businesses cope with this but also so can the larger businesses. The only issues will come when the branch closes its doors such that customers have to travel longer distances. Customers may decide to move banks, but then they may need to move;
- All their accounts
- Advise their customers and suppliers
- Set up new standing orders
- Transfer overdraft and financing arrangements
- This could be a step too far for some
An ideal world will be access to the regular business manager in a local area network. That manager needs to be accessible, sympathetic and understanding of the trials of running a small business.
So the bank branch closure should not upset the small or even medium sized business person.
Effectively and it was muted a few years ago, that the banks should get together and release themselves of their branch network. They should choose one or two (in slightly larger towns) sites that service the customers. They should contribute to those costs and have one or two of their representatives there, after all, the branch of a bank is really a cash transacting shop.
No lending, nor serious transactions are carried out there these days. They can close!
The world is becoming digital if not already fully digital and the banks will be the leading industry to go completely that way.