New research shows lack of movement in UK business banking
New research commissioned by the Chancellor in conjunction with the FSB and British Chambers of Commerce has found that the vast majority of businesses are unlikely to switch account providers in the next six months, which could be due to a lack of competitiveness in the banking sector.
The vast majority (85%) of all businesses said they were ‘not very likely’ or ‘not at all likely’ to switch provider in the same time period.
The research found that 14% of firms (one in seven) are ‘quite likely’ or ‘very likely’ to switch to a different business current account in the next six months.
Business Banking Insight (BBI), an independent website which looks at how well 15,000 of the UK’s small and medium-sized businesses are being served by banks and other finance providers, today unveiled its second wave of research.
The results were similar across all business sizes, although the research found that the figure for businesses likely to change banks was slightly lower for those with over 49 employees (11%).
Further findings show that 85% of businesses believe customer experience is important when they are choosing a bank, while businesses gave the provider of their business current account a satisfaction rating of between 59% - 68%, depending on the size of business.
The research found that 69% of respondents felt that access to online banking services was very important for their business compared to 52% who said that in-branch interaction was very important to their business and 41% of businesses who said that telephone services were very important to the operation of their business.
The research also found that the larger the organisation, the more likely it was to place high importance on online access to their business current account. This finding was the same for telephone services, with the 58% of mid-sized firms citing that this was ‘very important’, compared to 38% of sole traders.
John Allan, national chairman of the Federation of Small Businesses, said: “The Business Banking Insight (BBI) is…an important tool for bringing more competition into the banking market by enabling businesses to make more informed choices about which services are best suited to their needs.
“With one in seven (14%) businesses expecting to switch their current account provider in the next six months, we only expect interest in the BBI website from businesses to increase.”
John Longworth, director general of the British Chambers of Commerce, said: “With the latest Business Banking Insight (BBI) survey confirming that a large number of businesses are still unhappy with the level of service they receive from their finance provider, it is encouraging that some firms are looking to vote with their feet and switch institution.
“Despite online being chosen as the most popular method of banking, businesses still value traditional channels of communication, such as in branch and telephone.”
Anthony Browne, chief executive of the BBA, said: “Though the majority of business bank customers are happy with their current arrangements, this site allows any firm to shop around.
“The switching service now makes it easier than ever to change providers if they find a better deal. Recent research shows nearly 8 in 10 finance applications are being approved.
“We hope that the BBI website will inspire firms to get in touch with their bank to discuss their options.”
This was posted in Bdaily's Members' News section by Clare Burnett .
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