The study was commissioned by Highlands and Islands Enterprise (HIE) amid a growing trend of rural bank branch closures. Some closures can result in road and ferry journeys of more than 50 miles to the nearest alternative.

In its report, consultants Indigo House Group said banking facilities need to be understood as core to local community infrastructure. It added that there is a disconnect between local bank closures and efforts to strengthen and grow local economies.

Access to cash remains fundamental to the viability of small retail businesses, prominent in rural areas. This is especially in relation to tourism, where successes in generating income within fragile communities could be hit by the loss of access to cash via local banks.

Online banking, Post Office banking and mobile bank vans go some way to providing alternatives. However, concerns about these include cybersecurity, the fragile nature of Post Office contracts, and accessibility of mobile banks for less able people. Customers facing a shift from a local branch to a mobile bank considered this a backward step.

In its recommendations, the report called for a collaborative approach involving Scottish Government, HIE, local authorities, community members and delivery partners, including the banks and Post Office.

Specifically, the report recommended recognition of the importance of cash to local economies and support over time for a sustainable transition to digitally based economies.

Digital inclusion strategies should be created to support businesses in benefitting fully from digital banking and digital business, including promoting online payment methods. Further investment in internet infrastructure should recognise the need for sufficiently fast broadband to support economic growth in rural and remote communities.

The report also recommended a Post Office banking strategy that would include securing the long-term sustainability of contract Post Offices to support rural economies and infrastructure.

Collaborative banking hubs, also suggested, could use existing community buildings or council service points to provide part-time over the counter and digital support services for banking customers.

A final recommendation in the report is to consider the need for a minimum banking service standard to supplement the existing Access to Banking Standard. The revised standards could require banks to undertake economic impact assessments for communities affected by proposed closures.

Zoe Laird, HIE’s regional head of communities infrastructure, said:

“We would like to thank all those who took part in this extremely useful study. Their feedback and input has helped create a much greater understanding of the issues around rural banking services. Along with the findings of the Scottish Parliament Enquiry into bank closures this will inform how public sector agencies and service providers respond.

“We are sharing the report with all our partners, including Scottish Government, public agencies and councils across Scotland, and with providers such as banks, credit unions and the Post Office.

“Through collaborations such as Community Planning Partnerships, we will all be well-placed to develop an effective joint response that will enable the continued support for economic and community growth in rural areas.”

The full report on HIE’s rural banking study is available online at www.hie.co.uk/access-to-banking-services