North West SMEs feel banks have failed "fulfilling their foreign currency needs”

North West-based SMEs hoping to expand internationally are being hindered by poor service, unclear fees and a lack of appropriate products when using banks for international currency transfers, according currency experts, World First.

The survey of over 1,000 senior decision makers at UK SMEs currently trading internationally found that 40% of SMEs based in the North West felt that their bank did not understand their FX needs.

Furthermore, 48% of SMEs using a bank admitted to not understanding the charges applied to their international currency transfers, whilst 44% stated that their bank fails to offer them a full range of appropriate products to help them manage their FX needs.

Additionally, 35% said they did not think their bank acted in their best interests when managing their FX needs.

The research also highlighted the global ambitions of many SMEs based in the North West, with 92% stating that international expansion was one of the best ways to achieve business growth.

Despite this lack of understanding, 64% of SMEs based in the North West still use a bank for their international currency needs, over half 52% of these saying that they simply use the same bank that they have their business’ current account with.

However, 65% of businesses also said that they would switch to an alternative if they knew of a credible provider.

Jonathan Quin, CEO of World First said: “SMEs, the engine room of our economy, are telling us that they are not being served well by the banks when it comes to fulfilling their foreign currency needs.

“If we want UK businesses to achieve their potential, particularly those in the scale up phase and eyeing up international expansion, then we need to break down as many barriers for them as possible. More than half of businesses in our survey say that they have struggled to expand internationally and even if 1% of this is due to a lack of support from their FX provider, then this is simply too many.

“UK SMEs collectively transfer around £78bn a year, so there is now a huge responsibility on the industry and policy makers to better educate businesses on the benefits of a well-managed currency strategy.

“Not only can a currency strategy offer certainty and security in what is likely to be a volatile year in currency markets, there are also significant cost savings to be had. For instance, if all the UK’s SMEs saved just 1% on their annual FX bill, this would amount to a whopping £780m in total savings.”