Challenger banks provide better service for SMEs, says FSB study » SMEInsider

Challenger banks provide better service for SMEs, says FSB study

SMEs using challenger banks get better service than customers of the big high street players, according to research.

A survey of 12,000 small businesses found that the lenders that were ranked most highly were challenger banks – small retail lenders set up to compete with large, national ones.

Most big banks came in below average, the Business Banking Insight found.

 

Key findings:

  • More than a quarter of SMEs said they would recommend their bank to others
  • One in 10 would consider moving banks in the next six months
  • Customer satisfaction rates were around 60 per cent for the big four banking groups (Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC)
  • Top-ranked banks were Swedish lender Handelsbanken, and First Direct, the online and telephone-based bank owned by HSBC, both rated above 80 per cent

The Competition and Markets Authority said last year that challenger banks were finding it hard to gain market share because businesses were failing to switch lenders. A comparison website for SME bank accounts would help, it suggested.

Adam Marshall, head of policy and external affairs at the British Chambers of Commerce, which co-produced the research along with the Federation of Small Businesses, said: “SMEs are marginally more likely to recommend their banks this year than they were last year, which has to be a positive thing.

“But both the business and the banking sector realise that there is still a long way to go to rebuild trust between them.”