Woman with concerned expression

3 months ago

The Impact of Bank Closures on UK SMEs

As bank branches around the UK close their doors, there has been a noticeable effect on leaders and owners of SMEs. Losing access to a nearby bank slows down day-to-day operations, as it’s harder to make a quick visit during business hours to collect change or make a deposit.

At BusinessComparison, we wanted to find out what business leaders think about the decline in local bank branches. Our survey asked owners and senior decision-makers at SMEs about how often they use their local bank and what worries them the most about bank closures. We explored which payment methods their customers use and their thoughts on digital banking. The results span the whole country and provide insight into the differing priorities of business leaders of different ages.

Business Owners’ Biggest Worries

In our research, a large majority of the respondents agreed that there are now fewer banks near their place of work than there were 10 years ago, at 74%.

When asked to identify which, if any, of the following concerns worried them in regard to bank closures, 50% of business leaders said they were worried about the impact on other businesses that take cash payments.

This reveals a strong feeling of community between SME leaders - they all want their local area to thrive. They appreciate that other businesses near them are part of that ecosystem, and 88% worry about the impact bank closures have on their local area.

However, 49% of business leaders said they were not currently worried about the death of the high street, perhaps indicating a high level of confidence that their area will not be affected. That said, it could also suggest that their companies do not rely heavily on footfall and perhaps conduct more business online.

Furthermore, 41% of those surveyed said they were worried about the impact of all businesses dealing with cash, including their own, and 34% were worried about the impact on customers. Only 12% said they were not worried at all about bank closures.

How Businesses are Using Their Bank

With business owners agreeing that there are fewer bank branches in their local area, we wanted to understand how long it takes for them or their staff to access their closest bank, as well as their typical reasons for doing so.

51% of business leaders said it takes them or a staff member 11 to 30 minutes to make a trip to the closest bank - including the journey back, which could be as much as an hour out of the working day. 21% said that it takes between 31 and 45 minutes. For a minority at 15%, there is a bank less than 10 minutes away.

Pie chartOne important reason to visit the bank is to deposit any takings in cash. As 24% of business leaders surveyed said they take cash payments often, and 23% sometimes do, you can see that this will be something that applies to them.

Based on these findings, we can say that 16% of the businesses we surveyed lose 4 hours a month on trips to the bank to deposit cash, among other tasks. For 14% of business owners who go several times a week, that’s at least 8 hours. And 11% of businesses are losing at least an hour of their time every single day to go to the bank to drop off cash earnings.

Another factor related to cash payments is change for customers. 54% of business owners say they never need to collect change from their bank, but 23% go at least once a week. 47% of businesses never run out of change to give to customers - however, 13% do several times a week. When it might take a considerable amount of time to send a staff member to the bank and back, you can understand how it might get to the point that the business runs out of change - sending someone out every time the till is running low might leave the team understaffed.

Sometimes, it's necessary to withdraw cash from the business bank account for a reason other than providing change for customers. 35% of the business owners or decision makers said a member of their team never goes to the bank to withdraw cash, but for plenty of others, this is a regular outing. 20% stated they would go less than once a month, and 10% said they would go once a month. 25% go once a week or more often, which is a quarter of businesses losing at least 4 hours a month on trips to the bank to withdraw cash as well as other tasks.

While 33% said they never visit the bank specifically to inquire about account balances and statements, 10% go once a month for this purpose, and 11% go once a week. 15% go several times a week.

Going Digital

We asked business leaders how often they use digital banking services to do tasks such as transferring funds or arranging a cash withdrawal.











It’s evident that while physical bank branches are essential, the majority of businesses are able to conduct day-to-day tasks using their bank’s digital services.

Another aspect of running a business that has been changed by the introduction of digital technology is the introduction of alternative payment methods, such as Google Pay, Apple Pay and Revolut. We asked business owners to tell us which of the following payment methods they had found themselves using, either due to difficulty operating with cash or customer preference.



Apple Pay


Google Pay




None of the above


Differences Around the Country

InfographicLondon was the region most likely to say they often take cash payments, at 40% - the national average was only 24%. It makes sense then that this region was also the most likely, overall, to have a member of staff visit the bank every day, at 62%. London was also the most likely to run out of change several times a week, at 28% - more than double the national average of 13%.

SME decision-makers here were the most likely to report that there were, in fact, more banks near their place of work than there had been 10 years ago. While there was still a majority saying there were fewer local banks, at 56%, 22% said there were more, and 18% said there were the same amount. It suggests this region has seen the smallest decline in banks around the UK, perhaps because of the reliance on in-person bank visits here.

The South East also gave answers to the survey that were quite different to the national average. This region was the most likely to only take card payments, at 35% - across the entire UK, only 21% of business owners gave this answer. 74% of respondents said their business never goes to the bank to collect change, and 73% said it never runs out of change. That’s much higher than the national average - 47% of the whole country said they never run out of change to give to customers, which is 26% less than the South East.

London and the South East were the two significant outliers, showing that while the loss of our local banks is a nationwide concern, it affects businesses in different ways around the UK.

InfographicThere are several regions where a significantly higher percentage than the national average of 74% say there are fewer bank branches near their business than there would have been 10 years ago. All above 80 are;

  • East Midlands - 87%

  • East of England - 81%

  • North East - 86%

  • Scotland - 81%

  • South East - 82%

  • Yorkshire and Humberside - 81%

  • Wales - 83%

Gen Z, Millennial, Gen X and Baby Boomers

The survey revealed that younger business owners are more likely to make in-person visits to the bank. 45% of businesses run by 25 to 34-year-olds and 36% of those run by 35 to 44-year-olds send a staff member to the bank several times a week, compared to 15% of those run by 55 to 64-year-olds. Gen Z business owners aged 18-24 are the most likely to go to the bank several times a week at 51%, perhaps suggesting that these young entrepreneurs are more likely to rely on having a bank nearby.

The majority of businesses conducting transactions using digital alternative payment methods (Paypal, Google Pay, Apple Pay, and Revolut) are run by owners under 44 - for example, 41% have used these methods to take customers’ payments. Of those aged 45 and up, it’s only 24%.

Digital banking services are used fairly consistently across age groups until you reach business owners aged 65 and up. 38% of these respondents said they always use digital banking to do everyday tasks such as transfers, lower than the national average of 44%.

If you’re looking to switch to a new business bank account, we would be more than happy to help. You can use our online comparison service to check which banks are able to provide the services you require and fulfil your unique business needs.


This survey was answered by 1,000 UK SME Owners/Senior decision-makers aged 18 and over. OnePoll collected the data on behalf of BusinessComparison between 16 and 23 February 2024.

Business Loans icon

Business Bank Accounts icon

Invoice Finance icon

Business Energy icon

Business Broadband icon

Card Machines icon

Business Credit Cards icon

Business Insurance icon

Leased Lines icon


Sam White