1.7m SMEs in the market to switch their business current account
19 November 2018
- As the RBS Incentivised Switching Scheme opens for applications, The Co-operative Bank confirms that it will apply to the Scheme as well as considering its wider options.
As applications for the RBS Incentivised Switching Scheme open today, new research from The Co-operative Bank highlights the demand for more competition in the business current account market amongst the nation’s 5.7 million1 small and medium sized businesses (SMEs). Almost a third of SMEs state they would definitely consider switching their business current account and a majority (86 per cent) say they would be open to doing so.*
The research carried out by The Co-operative Bank indicates that small and medium sized businesses have held their current business account for an average of 8.5 years, with more than a third holding their account for 11 years or more. Although almost half (46 per cent) state they have previously switched to a different business current account, only 1 in 10 have switched their business current account in the last two years. High account charges (56 per cent) remain the biggest barrier to switching.
Looking forward, larger businesses (with a turnover of over a £1m) are twice as likely to switch in the future compared to smaller businesses (with a turnover of under a £1m) – with 47 per cent saying they would definitely switch compared to 22 per cent. This also mirrors past switching behaviour with the research highlighting that 6 in 10 larger SMEs have switched their current account in the past compared to 4 in 10 smaller businesses.
The Co-operative Bank confirms today that it will apply to the Incentivised Switching Scheme, which forms part of the RBS alternative remedies package, as well as considering its options more widely. The Co-operative Bank currently looks after the banking needs of circa 90,000 SMEs, 700 co-operatives, 5,000 charities, and 279 credit unions. The Co-operative Bank’s award-winning Business Directplus Current Account was rated Five Stars by Moneyfacts in 2018 and offers 18 months of free banking to eligible customers.
Andrew Bester, CEO at The Co-operative Bank commented: “The Co-operative Bank has a heritage in providing banking services to small and medium sized businesses and we are recognised for our strong service culture. We want to build on that moving forward using the strength of our brand and distinct ethical positioning and believe we can be a part of helping deliver greater competition in the market as a whole.
“The Incentivised Switching Scheme will offer more than 200,000 small-to-medium businesses an alternative way of banking. As the only UK bank with a customer-led Ethical Policy, we are able to offer products and services which not only meet SMEs’ everyday business banking needs but align with their values - whether supporting causes in the North West, where we have grown from, or projects in communities around the UK and beyond. This sets us apart from other banks and is a significant reason why many of the circa 90,000 SME customers we currently support have chosen to bank with us.”
Notes to Editors
*Research by BVA BDRC of 250 SME Business Decision Makers conducted via an online survey between 25 September and 1 October 2018.
1 The Department of Business, Energy and Industrial Strategy (BEIS) recorded 5.7 million SMEs working in the UK during 2017
The Co-operative Bank has a unique partnership with the Federation of Small Businesses (FSB), the UK’s largest membership body and voice of SMEs.
About The Co-operative Bank
The Co-operative Bank p.l.c provides a full range of banking products and services to around four million retail and SME (Small and Medium Sized Enterprises) customers and is committed to values and ethics in line with the principles of the co-operative movement.
The Co-operative Bank is the only high street bank with a customer-led ethical policy which gives customers a say in how their money is used. Launched in 1992, the Policy has been updated on five occasions, with new commitments added in January 2015 to cover how the Bank operates its business, products and services, workplace and culture, relationships with suppliers and other stakeholders and campaigning