Back in December, the Banking Competition Remedies Ltd (BCR) named 11 banks to participate in the Business Banking Switch, or Incentivised Switching Scheme. The scheme is designed to tempt business customers away from The Royal Bank of Scotland (RBS) and NatWest by providing offers that are better than those normally on the market.
Following the £45bn Government bailout of RBS, the bank agreed to increase competition in the business banking sector, which had previously been dominated by the organisation. It is targeting SME banking customers with RBS who were due to be transferred to Williams & Glyn – and more specifically, those with a £25m turnover or less and who are not in any financial difficulty. But what do we know about these challenger banks? And should you switch? Here’s what we know so far.
Of the 11 challenger banks chosen, nine launched offers at the end of February. These are:
- Santander UK
- The Co-operative Bank
- Arbuthnot Latham & Co., Ltd
- Clydesdale & Yorkshire Bank
- Hampden & Co
- Metro Bank
- Starling Bank
- Monzo Bank Ltd and Nationwide Building Society are thought to be launching their offers later this year.
Handelsbanken recently topped the Competition and Markets Authority (CMA) league table as the best business bank and has confirmed that switchers will receive a cash payment in full once their balance is transferred. However, you will need to log in to to check your eligibility and individual incentive amounts.
Metro has been awarded the largest portion of funding from Pool A of the Capability and Innovation Fund. Again, part of the BCR’s overall strategy, the Capability and Innovation Fund distributes grants to challenger banks, allowing them to improve on their current SME offering in order to attract new customers.
If you are a tech-savvy business owner who wants real time updates from your banking platform, then mobile-based Starling could be the account for you. Starling has confirmed that it will use its reward from BCR to launch an online portal for customers, which will sit alongside its mobile banking app.
Your client manager can advise you on which bank is most suited and the offers presented, to help you select the right option for your business in the long-term.
For more information, contact our qualified accountants in Preston, Manchester, Blackpool or Chester.