The pros and cons of switching banking partners

“There is certainly that question about changing sales into action,” says Andy Blackstone, FD at M&C Saatchi. “We all meet sales people that promise a lot of things, but how often are those offers actually turned into reality?”

Along with the perception of many FDs that all banks are essentially the same and as bad as each other, a further 19 percent of survey respondents felt that switching banks would complicate transactions, while 13 percent thought the cost of switching was too high.

“The biggest hurdle is the inertia when it comes to changing,” says Tony Ratcliffe, FD of risk management software provider Brady. “The hassle of telling all your suppliers and changing all the direct debits puts you off taking action. The banks say it can all be automated, but in the same way that you know you can save a few bob by switching energy supplier, you are often left wondering whether it is worth the hassle. The real cost of switching is the time it takes and the general nuisance involved. But I don’t think there is not a real financial cost to switching.”

Lane agrees switching banks can become an “administrative nightmare” although the issue should not be blown out of proportion.

“It depends on what facilities you have got with the bank,” he says. “Some companies have quite sophisticated borrowing arrangements that require lengthy notice periods. If you simply bank with a current account with no other facilities, then you can change tomorrow.”

According to Blackstone, one of the main barriers to switching banks is technology.

“The technology barrier depends on how you have set up your accounting system,” he says. “Changing banks can mean that you have to change the set-up of your accounting software.”

But not all FDs agree that changing banks overly complicates transactions. Morling at EC Harris says that if you find the right partner who is willing to go the extra mile, switching accounts can be a pain-free experience.

“Ultimately, it is easy to move banks. We have just moved all of our overseas banking to one bank. The bank project managed the entire process,” says Morling. “You just need to talk it through with the bank and it can take you through the process. That is what brought the value.”