Bank recommendation levels are showing some improvement among the UK’s small to medium enterprises (SMEs), according to a survey of business experiences of banking services.
The Business Banking Insight report (BBI), conducted in two waves over the first and second halves of 2015, found that 26% of SMEs said they would recommend their bank to others, up from 23% in 2014.
The survey of over 12,000 UK SMEs – conducted by ICM and overseen by both the British Chambers of Commerce (BCC) and the Federation of Small Businesses (fsb) – also found the firms most likely to report improved satisfaction tended to be younger and larger businesses.
Businesses created since 2010 to date, are much more likely to consider moving their business current account in the next six months, at 15%, compared with just 8% of firms founded before 2000 and a UK national average of 10%. This is despite higher-than-average business current account satisfaction among younger businesses: 33% are satisfied with their business current account, compared to the national average of 30%.
When comparing sectors, only 20% of businesses in the financial services sector are likely to recommend their bank against a 26% average for all firms. Businesses in mining, utilities and accommodation and food services were the happiest with 31% keen to recommend.
SMEs in Northern Ireland had the highest levels of recommendation with their banks, at 28%, compared with those in Wales, down at 22%. The respective recommendation figures were 21% and 25%.
The UK’s Competition and Markets Authority (CMA) is conducting an investigation into SME banking and has highlighted the importance of providing businesses with information on service quality.
John Longworth, BCC director general and spokesperson for the BBI, said: “It is reassuring that there has been progress in improving customer satisfaction among businesses, but there is clearly more to be done.
“Competition among lenders is driving this change. Businesses look to other businesses, and we would like to see the CMA promote initiatives like the BBI, which lets SMEs across the UK learn from the experiences of their peers before choosing products and services.
Mike Cherry, FSB national policy Director and spokesperson for the BBI, added: “The results show the banks are making some progress in improving their offer to younger and larger SME business customers. They also show how the wider industry can continue to have lessons to learn from newer banks in the market.
“This is a clear demonstration that improving competition in the business banking market can lead and should lead to improved services for all small businesses.”
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