BANKING - THE FUTURE FOR SMALL TO MEDIUM SIZED BUSINESSES
April 9th, 2019.



There is nothing small about the small to medium-sized business (SME) sector in the UK. In 2018 it accounted for 60% of all private sector employment, according to the Federation of Small Businesses, with a combined annual turnover of £2 trillion making it a significant contributor to the economic health of the country.


This makes SMEs hard to overlook and yet this is precisely how many feel they have been treated by the banking industry. A common complaint is that banks do not understand them, do not focus enough of their product and service development on them, and leave them stranded somewhere between a ´retail plus´ and a ´corporate lite´ customer, meeting few of their real needs.

The ´big four´ high street banks have dominated the SME banking market in the same way that they do the retail segment.
This is unsurprising as ready access to an adviser in a high street branch, brand awareness and a lack of alternatives have created a strong pull to small businesses towards known providers.

The good news is that active steps are being taken to break this stranglehold. As recompense for the bailout RBS received during the financial crisis, the government-sponsored Alternative Remedies Package worth £775 million carved out of the bank has a primary goal of kick-starting competition in the SME banking sector. The Incentivised Switching Scheme is part of this initiative and will provide funding of up to £275 million to encourage SMEs to move their accounts from Williams & Glyn, RBS’s corporate banking entity, to other eligible institutions.


For the full story at growthbusiness.co.uk CLICK HERE.