As the fallout from Royal Bank of Scotland‘s Global Restructuring Group scandal continues, the U.K.’s Federation of Small Businesses is now calling on the financial institution to take measures to support the small businesses it harmed.
Reports in MondoVision on Friday (Feb. 23) said FSB National Chairman Mike Cherry is calling on RBS to reinvest the profits it posted in the small business community. According to reports, RBS posted its first profit gains in 10 years after shuttering more than 250 branches of RBS and NatWest locations last December.
“The branch closures announced by RBS at the end of last year are set to limit access to banking for small firms all over the U.K.,” said Cherry in a statement. “Time that business owners spend traveling to and from bank branches that are miles away is not time spent running and growing their firms.
“Now that RBS is profitable again,” he continued, “it should look closely at how it can support the communities it’s threatening to leave behind with waves of branch closures. The bank has benefitted from public support over the years. It’s important that it now returns support to the public and small businesses.”
The role of the physical bank branch is in question for small businesses and other banked populations. A 2017 report by Avoka found that banks across Europe, North America and Australia are forcing small businesses to go to physical branches because they do not offer adequate online services.
“Almost all of our members bank online, but they hugely value in-person support when it comes to opening new accounts, discussing finance options and getting to grips with digital banking,” Cherry continued. “Naturally, in many rural areas, there’s no guarantee that broadband speeds will be good enough to bank online reliably. We’re seeing challenger banks with a focus on branch expansion also reporting strong profits, so we know it’s an approach that works from a commercial perspective.”
Cherry added that RBS’s profits report showed that “only £150 million of the £400 million that RBS has set aside for Global Restructuring Group victims has been passed on to those who had their lives destroyed.”
“There have been question marks about whether or not the £400 million is enough,” he said. “In any case, the redress process is clearly not moving quickly enough.”