SME Banking

When it comes to banking SMEs don’t have a lot of choice. If you want the full service range there are only a handful of banks to turn to. Unfortunately the quality on offer falls well below expectations and it’s got worse not better. Anecdotal experience offers valuable insight. Here are a few recent experiences: Call centres: Replace the account manager. 10 minutes call waiting. Call “dropped”. Unworkable security. Internet banking: Replaces everything. No choice. Marketing calls: Bank “Hello, I’m calling you from XZY bank. May I ask you some security questions.” Me “Surely I should be asking you, I’m being always being warned about fraud.” Marketing calls: Bank “Can we lend you some money.” Me “No but I would like to talk about another product.” Bank “Sorry we can’t do that and we can’t help.” Fee paying accounts: Involuntary transfer to these poor value products. Deposit rates: Inferior terms and a second rate product range. Why do retail savers get better deals? If you own a SME and particularly if you borrow money I bet you can add to this. Competition should sort this out so why are we being “done”? The fact is it’s hardly a competitive market. Moving accounts becomes the choice between rock and hard place. In an economy where SMEs account for over 99% of businesses, 33% of private sector turnover and employ nearly 50% of the work force this is not a minor issue. It’s the transfer of value from one sector of the economy to another. That’s why I welcome the Competition and Markets Authorities enquiry into SME banking. Let’s hope this time that the outcome is better. In the meantime if the new entrants can live up to their moniker as “challenger banks” it will be good news.