NEARLY HALF of UK SMEs do not differentiate between the ‘Big Four’ high street Banks, with perceptions deteriorating the smaller the business is, according to supply chain finance company Platform Black.
Just one in ten (10%) of 650 respondents across manufacturing, retail, IT and construction believe that the services major banks offer are better than those available from new ‘challenger’ banks such as Santander, Handelsbanken and Metro.
Only 7% of businesses in their first year of trading or with an annual turnover of less than £1m believed that the traditional banks offer a better service than the challengers. The picture is not much better further up the scale with only 15% of companies with an annual turnover of £10m or more considering the major banks’ offering to be superior.
Despite the dominance of major banks – with control of 85% of SME sector accounts and 90% of lending – small business are increasingly casting their eye to alternatives, said Platform Black co-founder Louise Beaumont.
She said: “Our survey provides evidence that the decision-makers in newer and smaller businesses, which will be the large and established businesses of the future, are increasingly open-minded about who will provide their banking and finance.
“The really big difference this time around is that the government is on the side of the revolutionaries. Competition is the new byword and the possibility of an official investigation into the workings of the banking sector is concentrating a lot of minds. We should know whether the government will go down the full investigation route sometime in November, once all the evidence that is currently being gathered by the Competition and Markets Authority and the Financial Conduct Authority has been assimilated. It could herald the way in which businesses in this country are financed in the future.”