Experienced bankers are moving into the alternative finance sector, creating an ideal environment for SMEs seeking finance, according to alternative finance provider ThinCats.
The peer-to-peer lending company discussed the trends that have taken place in the banking sector over the past decade, with the main change being the loss of high street branches as banks shift to digital services.
The shift towards digital banking was highlighted in a 2016 study from the Federation of Small Businesses, with 1,500 towns being without bank branches as banks aim to direct their customers towards digital banking.
Whilst more than 90 per cent of small businesses use internet banking, face-to-face services are still valuable to businesses when it comes to making decisions regarding the future of their company and obtaining finance.
ThinCats highlighted the issues surrounding the reduction of bank managers on high streets, stating that it has resulted in the disappearance of experience that is needed to provide SMEs with information on funding to help them develop their business. However, the peer-to-peer lending firm said that the majority of bank managers have stepped into the alternative finance and commercial finance sectors, allowing SMEs to have access to personal and professional services and industry knowledge.
Commenting on the trend, ThinCats Business Originator for Wales and the M4 Corridor Alison Whistance added: “I have seen a lot of change over recent years. With local bank manager autonomy stripped away, many companies struggle to access funding to grow and evolve.
“With advancing technology and changing buying habits, it is imperative to adapt and invest quickly, but traditional methods of lending seem increasingly restricted. The alternative lending market continues to grow and is playing a vital role supporting UK SMEs.”
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