What can banks do to address Britain's productivity crisis?
Jonathan Thompson, founder and CEO at BankNorth UK | 15:20 Wednesday 5th June 2019 | 0
Poor productivity is seen as one of the biggest (perhaps the biggest) economic challenges facing Britain.
Productivity — which is measured by the amount of work produced per working hour — is one of the main drivers of long-term economic growth and higher living standards.
However, growth has been sluggish over the past decade as the UK economy focused on recovering from the downturn triggered by the 2008 financial crisis and with the Office for National Statistics (ONS) referring to the UK’s "productivity puzzle".
In the future, small businesses have a vital role to play in boosting Britain’s productivity — SMEs make up the majority of UK businesses. Increasing productivity within the SME sector would make a huge difference to the UK’s economic output, and here at Project BankNorth we recognise that specialist banks have a crucial role to play in supporting Britain’s entrepreneurs.
Project BankNorth is in the process of building a bank designed specifically to support the needs of SME borrowers in the UK, with the aim of improving access to finance for this critical segment of the UK economy.
So, what can specialist banks do to support SME productivity?
First and foremost, in order to drive economic growth, specialist banks must lend to businesses in order to help them grow and evolve. In addition, they must continue to provide competitively priced finance that can help firms to invest in the future.
Here at Project BankNorth, we believe a personalised approach is vital in providing SMEs with the tailored support they need to grow and can significantly help to tackle today’s productivity conundrum.
Invest for success
Second, for businesses to successfully help to solve the productivity problem they must be willing to invest. To do this, SMEs require consistency and clarity of approach by banks so that they can have the confidence to invest and grow their business.
That means being committed to the SME space, providing quick decisions (yes or no) and delivering finance at the pace required by the business. Furthermore, the ethos of the bank and its interaction with customers should be based on traditional principles, including those of trust, transparency and simplicity.
Finally, two of the most common problems causing lower productivity is a lack of sufficient training and up-to-date technology.
SMEs which invest in their workforce and include opportunities for career growth are more likely to attract talented, hardworking and ambitious employees, who seek a career that can offer them the personal growth they crave.
Project BankNorth aims to make the process easier for SMEs to secure funding, which we believe will enable them to implement business growth decisions at pace. By investing and improving their business, an attractive by-product is that this should make the SMEs better, more rewarding and engaging places to work. This will help to continually improve the UK’s workforce and support an improvement in productivity.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Leek United reveals mortgage rate reductions
Leek United has revealed rate reductions for two of its most popular mortgages...
Gravity selects Finastra to power banking and lending services
Gravity has selected Finastra’s Fusion Essence in the cloud solution for its end-to-end core banking capabilities...
An interview with Paul Stockwell: Islamic finance has ‘enormous opportunity’ for growth over coming years
In an interview with Specialist Banking, Paul Stockwell, chief commercial officer at Gatehouse Bank (pictured above), discusses increasing awareness of Islamic finance and opportunities in the banking world...
Revolut for Business launches expense management tool
Revolut for Business has launched a new expense management tool designed to simplify the handling of expenses for growing businesses...
Leek United strengthens intermediary team
Leek United Building Society has strengthened its intermediary team with five new appointments...
BCR awards £10m to Atom bank
Atom bank has received a £10m grant as part of the Capability and Innovation Fund Pool C grants announced by the board of Banking Competition Remedies (BCR)...
Bank of Ireland UK updates broker portal
Bank of Ireland UK has revealed that it has relaunched its broker portal...
Unity Trust Bank increases lending by 47%
Unity Trust Bank has reported an underlying pre-tax profit of £4m in H1 2019, an increase of £1.2m compared with H1 2018...
Taxing times for SMEs
Small business owners are the most creative and resilient individuals I know...
Metro Bank to open first store in the Black Country
Metro Bank is set to open two stores on 20th and 21st September in Solihull and Merry Hill...
TMA Club adds Harpenden Building Society to lender panel
TMA Club has added Harpenden Building Society to its lender panel, giving its members access to the building society’s range of mortgage products...