The findings of this round of analysis have exposed a peculiar lack of differentiation by SME attitudes towards the big 4 banks. Nearly half of the country’s small businesses (47%) do not see any difference between the major high street banks. Only 10% of those same businesses believe that the big 4’s services top those offered by the new “challenger” banks such as Handelsbanken and Metro.
This latest survey – commissioned by Platform Black but carried out by YouGov – also found that the smaller business under scrutiny, the lower that businesses opinion of the major banks. Of the surveyed businesses that were less than a year old or had an annual turnover of less than £1m, only 7% believed that traditional banks provided a better service than the challengers. Of those businesses with an annual turnover of £10m or more, still just 15% were fans of what the high street banks had to offer.
But what’s the significance of so large a proportion of SMEs holding the major banks in such low esteem? Louise Beaumont, Co-Founder of Platform Black, explained:
“There is a revolution taking place in the banking and finance sector. The ‘Big Four’ may still control 85 per cent of SME sector accounts, and 90% of lending, but awareness of what is available from challenger banks and providers of alternative business finance, such as Platform Black, is growing rapidly and the trend is probably irreversible. 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 (CMA) and the Financial Conduct Authority (FCA) has been assimilated. It could herald the way in which businesses in this country are financed in the future.”
