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17 May 2016

Banks must do more to help small firms

The Competition and Markets Authority's (CMA) latest provisional recommendations on changes to the retail banking sector should help small firms. The report proposes changes to make it easier for small businesses to compare banks and switch more easily to get a better banking deal.

Mike Cherry, FSB National Chairman, said: “Today's banking market does not work well for small business. We welcome the package of measures aimed at boosting awareness of the Current Account Switching Service (CASS). Current levels of switching among small firms are far too low, with only 4 per cent of FSB members switching in the last year. Small business owners are still not confident that switching banking products or services will be a risk-free, seamless process, and as a result, many choose not switch. A new awareness campaign and measures to make switching transparent are promising steps.”

We agree with the CMA’s view that better transparency around prices, charges and availability of lending products will make it easier for small business customers to shop around. The proposals' focus on a new online comparison tool should help businesses feel more confident when trying to find the bank that best suits their needs. FSB believes Business Banking Insight (BBI), the most comprehensive small business banking resource of its kind, is a valuable service for small firms, with a new and improved website due to be launched this summer. If the CMA decides to support Nesta’s ‘challenge prize’ in its final report, it must be careful to ensure any subsequent development of new comparison services does not complicate or confuse the advice process for small firms.

FSB Business Banking from FSB

FSB members are entitled to a specially tailored bank account from the Co-operative Bank, giving you the freedom to focus on running your business.

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