The original plan was to help 120,000 businesses switch banks by August 2020, payouts are now being raised to reach that goal.
One of the cornerstones of the Banking Competition Remedies fund’s £775m package of payouts to boost UK business banking is being updated at the end of the month.
The so-called Incentivised Switching Scheme (ISS) was launched in February 2019 to offer payouts for 120,000 business customers of RBS subsidiary Williams & Glyn to switch to one of a dozen other business banks, including Starling Bank,Metro Bank and Santander.
Today the BCR admitted that “more needs to be done to get closer to the Scheme target of 120,000,” but didn’t reveal how many switches had been completed to date.
The announcement came along with an increase in the payouts for businesses to switch of between £500 and £1,000 based on the turnover of the SMEs.
An existing Williams & Glyn customer with a turnover of between £500k and £1m will now be offered £4,000 to switch, up from a previous offer of £3,000.
“The number of switches has doubled since ISS began, representing a significant increase in switching rates for the SME sector,” said the BCR’s chair Godfrey Cromwell.
“This decision is based on analysis of the first year of operation of the whole Scheme and the success of the temporary increase in dowry for Bands 1 and 2.”
The original plan was for the ISS to spend £225m over 18 months on the scheme, but clearly the BCR us concerned about missing that deadline.
There are no changes being made for the incentives offered to businesses with turnovers of more than £1m.