A Specialist Banking poll has revealed that 84% of industry professionals expect more SMEs to switch banks this year.
According to a study by the Co-operative Bank, 86% of SMEs are open to switching their business current account, while research by Unisys Corporation revealed that almost half of UK SMEs (47%) would move to a challenger or non-banking brand if they decided to switch.
Data from the FSB showed that there were around 5.6 million SMEs in the UK at the start of 2018.
Figures from Bacs Payment Schemes Limited revealed that only around 3.3% of all switches using the current account switching service from January to November 2018 were made by SMEs and charities, with the vast majority of such switches being for personal banks accounts.
Why would SMEs be more likely to switch in 2019 than in previous years?
“The poll results mirror the findings of our own research, which has found that SMEs are increasingly considering switching their business current accounts,” said Ryan Etchells, head of SME banking at the Co-operative Bank.
“Our findings indicate that SMEs have typically held their current business account for an average of 8.5 years, with more than a third holding their account for 11 years or more.
“Although almost half (46%) say they have switched previously, just one in 10 has done so within the last two years, with high account charges (56%) the biggest barrier to switching.”
The Co-operative Bank currently serves around 90,000 SMEs.
“However, the range of offers available means that, now more than ever, SMEs have a real choice when it comes to selecting a bank which will support their specific needs and aligns with their values,” added Ryan.
Countingup has signed up over 8,000 SMEs since its launch in the first half of last year.
Andrew Garvey, chief commercial officer at Countingup, said: “The technology of the new business banking providers is also more up to date and reflects how people want to run their businesses.
“We are launching invoicing functionality within Countingup in January, which means a small business owner doesn't need to have to log into three or four separate apps to manage their business finances.”
Stuart Hulme, director of savings and marketing at Hampshire Trust Bank, added: “SMEs are increasingly looking for their bank to provide specialism and expertise, not just credit and transactions.
“SMEs are willing to move to banks who take the time to understand their businesses and markets: banks who can provide customers with excellence through specialism.”
What are specialist banks’ SME ambitions for 2019?
“We believe the RBS alternative remedies package – intended to increase competition in the SME business banking market – presents significant opportunities for us to develop our products and services over the coming year,” claimed Ryan.
“Our application to the incentivised switching scheme has already been successful, and we have also applied to the pool of funding, which will allow us to enhance and expand our current account and lending services.”
Andrew added that Countingup would continue to roll out new features in addition to existing ones, such as invoicing, expenses and automated bookkeeping.
“Our mission is to be the financial platform for one million businesses, so we'll continue to work towards that goal.”
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