Where have all the bank managers gone?

Bank closures are affecting clients and forcing accountants to fill the gap.

High street banks have become something of an endangered species, with the closure or planned closure of over 5,000 high street banks since 2015.

With more and more customers turning to online banking, there’s less demand for physical bank branches and banks are also looking to reduce business costs (overheads, salaries and so on). Inevitably, bank managers themselves are declining too. Back in 2019, Phil Hobden, at Wolters Kluwers wrote on LinkedIn that 55,000 bank managers had left the profession since 2008.

Despite this, there’s been a huge increase in small businesses – the Federation of Small Business (FSB) says the business population increased by two million between 2000 and 2022. Naturally, all these businesses require banking services, but with the decline in bank managers and high street banks, businesses and their accountants are experiencing huge issues. Not least because 20% of small businesses use physical branches as a ‘primary means of banking’, according to a House of Commons Library Research Briefing paper.

Accountants who have taken on more strategic, advisory roles for clients in recent years are having to step in to fill the gaps left by high street banks. But even with a good accountant, small businesses still require authorisation from bank managers to access vital facilities and services.

Some of the main issues businesses are experiencing include:

• Limited access to cash.
• Just one bank manager to cover one entire region, leading to huge delays for services, advice and support.
• Inconsistent advice or service accessibility through different channels (in branch, online, telephone or via Post Office networks).
• Inability to access online banking due to poor internet connectivity.
• Closure of high street branches creating an advice gap for small businesses.

We spoke to accountants whose clients are having issues with banking services to find out what the pain points are and how they’ve been helping.

It’s easier to contact me than the bank

Julie Pocock MAAT Kingfisher Services Yorks

Some clients have been struggling to access bank services recently. We are located in a small, but busy, market town in North Yorkshire, which has a thriving high street with many small, independent businesses. Unfortunately, all of the banks closed their branches here, leaving the town with no banking facility. The many cash-based businesses have struggled to bank their takings on a daily basis.

The two cash point machines left in the town regularly run out of cash, especially during the tourist-heavy summer months. Businesses then lose sales if people cannot access cash and the business does’t have a card machine.

Clients also report issues seeing their bank manager. Waiting for the appointment then traveling to another town several miles away to attend. It’s costly financially, and in terms of time. I have been approached with questions about overdrafts, loans etc, just because it is easier to ask me than contact the bank.

However, there will soon be a new Banking Hub opening, which will enable customers of the major banks to carry out cash transactions and get help and support from a Community Banker service.

Verdict: I answer questions about overdrafts and loans because it’s easier for clients to contact me than their bank.

Small tasks have become a huge battle with the bank

Samantha Perkin FMAAT, Director, Zamu and lecturer at Cornwall Business School

The closure of bank branches has massively affected my clients, many of whom are still taking cash because they’re in the hospitality or charity sector. They have to get the cash into the bank but our nearest one is a 45-minute drive away.

Bank managers are just non-existent unless you’re turning over several million. Traditionally, bank managers would scrutinise accounts so if a customer needed a loan, the manager would be able to see if the business was in good shape. Now it’s accountants who do this.

Overdraft applications are done via computer now, so if you’re turned down because you don’t meet set criteria there is no one you can speak to. Clients then have to turn to more expensive long-term loan options when all they need is a short-term option.

Charities in particular just don’t have a choice. They can’t do everything online and things which should be simple becomes impossible. One of my clients, a charity trustee, got married seven years ago and changed her name. She’s filled out the change-of-name form four times but has given up because it was just a huge battle with the bank. There is just no one to deal with these things anymore.

I’d like to see a contact centre with named staff who specialise in specific industries. Then you’ll have someone who really understands the market and the customer’s account and what they need.

Verdict: Small tasks like changing a name have become a huge battle with the bank. We need a contact centre with named staff specialising in specific industries.

OnlyFans clients with limited companies can’t open accounts

Andy Liston, Director, OnlyAccountants

My clients are predominantly in the OnlyFans adult industry and experience huge problems with setting up bank accounts. They’re automatically rejected if they mention OnlyFans.

Sometimes clients tell banks they work as ‘influencers’ instead, which is partly true, but as soon as banks see money coming in from OnlyFans, they close the account.

I get weekly emails from clients saying their account has been closed or their application has been rejected. And many of these clients have been turned down for mortgages.

There are a few online banks that specifically target the adult industry but they charge huge fees. Clients tell me it can be up to £25 just to pay an invoice and then they lose money on exchange rates, too.

The issue is around risk. The adult industry is seen as a dangerous one, and there are human trafficking concerns, but this doesn’t usually apply to OnlyFans. OnlyFans themselves have extensive security measures before allowing anyone on the platform and they continually monitor the content.

It’s also extra time and hassle for banks: I’ve had one bank manager say to me “Why would I take a week doing background checks on a potential customer when I can open a bank account for another customer instantly?”

These issues mainly affect clients with limited companies. Self-employed clients usually use a specific personal bank account for business and you don’t have to go through the same application process, but it’s always on people’s minds that the bank could close their account at any time.

Verdict: OnlyFans clients cannot open bank accounts and face resistance from bank managers who do not want to spend time on background checks.

Would you like to contribute to future articles like this one? If so, please get in touch with Annie Makoff-Clark at [email protected]. Upcoming topics include: leveraging professional membership, whether technology is improving workload and the disappearance of cash from the economy.

Annie Makoff is a freelance journalist and editor.