High street banks neglect small biz
Written on 10/08/2018

The hardest thing for a new business today is opening a bank account. 
It is a good idea to look at new starts in this area, if you are struggling.  Metro bank and https://finecobank.com/uk/online/ and Shawbrook have a keener risk appetite than the older high street banks.  
High street banks are neglecting the SME market opportunity due to a variety of factors. 
One of the main problems is the onboarding process, where in many cases the ownership structure can be unclear, leading to difficulties around initiating relationships with SME businesses. Second, the nature of the SME growth model makes it difficult for banks to determine the value of the business opportunity. This poses problems when it comes to granting credit facilities to SMEs, as they are seen as higher risk for conducting business with. 
Third, banks follow bigger sources of revenue and SME profitability is lower than with larger customers.  Finally, existing legacy software systems prevent large banks from servicing SME customer demands which go beyond traditional offerings.  You can see that by the enthusiasm with which the old life offices still send out paper statements.    It is hard to change a process – vested interests and cost defeats managerial enthusiasm.  The impact of this underserving is that SME’s are seeing the value in using non-banking entities such as paypal.
“The hardest thing for a new business today is to open a bank account – regulation strangles competition!”
IFAC wrote this on a Times blog, and we got a bit torrent of recommendations and followers!
One enterprising man opened http://guaranteed-business-accounts.co.uk to help.  
This is part of the grand sounding Card One Banking Customer Services.  
But sadly ten minutes of research led me to this page….a £55 fee to find out what happens next!!!!

What’s the betting that having done your £55, you dial a number and you get a choice of ten departments, and they are all managed by the same person at the same desk?

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