The number of bank branches in Scotland has reduced by a third between 2010 and 2017
This survey has highlighted significant market failures in the provision of local banking in Scotland. We anticipated that businesses in rural areas would likely report difficulties. The issues were the same for cash handling businesses in rural and urban areas right across Scotland. The problems caused by bank closures in rural areas can be far greater, simply due to the lack of alternative services. The longer distances required to travel, the lost time and resultant productivity as well as the cost of travel all compound the issue in rural Scotland.
Rural areas and smaller towns also seem to experience a wider societal impact as cash handling shops such as local grocers, petrol garages, newsagents, gift shops and pubs are core to creating and maintaining a sense of community as well as making rural life more accessible. They are also vital to tourism. In the cities, businesses are having to go longer without banking takings. As well as slowing cashflow it can be a major fear for small business owners that holding money makes them more of a target for violent crime. We conclude that the rapid rate of local branch closures in Scotland (especially in rural areas) represents a clear market failure that requires Government intervention.