Business Bank Switching

Business Bank Switching is low. According to data from the Charterhouse Business Banking Survey, just 3% of SMEs with a turnover of up to £25m have switched banks in the past few months, and this has remained static since 2016.
In an effort to stimulate more competition, the Competition and Markets Authority (CMA) promote data that states that businesses could save an average of £80 per year by switching bank. So far, this doesn’t appear to have impacted on switching behaviour.
Inertia and apathy undoubtedly play a role in low-level switches. However, businesses are actually fairly satisfied with the service they receive from their main bank. This, coupled with real and perceived barriers to switching business bank accounts such as the perception of hassle and increased complexity, and a perception of lack of differentiation in bank offerings, has led to a very static market.
Both the CMA and the FCA are committed to making it easier for customers (both business and personal) to shop around to get the best deal. An overhaul of the Current Account Switch Service (CASS) was announced in January 2017. This was designed to give further reassurance to small business and consumer customers that all their payments will be switched from their old account to their new one, and so overcome a key concern about moving banks.
More than one year on, we asked more than 2,000 small business customers (with a turnover of up to £6.5m) what they know about CASS and what effect, if any, it’s likely to have on their propensity to switch current accounts.
Key take-outs
Awareness and knowledge of CASS is low
• Just under half of all businesses are aware of CASS for businesses like theirs but only one in five have real knowledge of the service
• More than half have not heard of CASS for businesses and 29% have not heard of CASS at all
• Awareness is lower in certain parts of the country – e.g. Wales, South East
• Younger businesses (and business owners), smaller businesses and female owners are least likely to be aware and knowledgeable
The biggest barrier to switching is lack of a ‘push’ factor – businesses are satisfied with their current bank!
• Although CASS could remove a key barrier to switching, if the push factor of dissatisfaction with the existing bank isn’t there, hassle-free switching is inconsequential
Greater awareness of the CASS service could increase switching
• Although the majority of businesses say knowing about CASS has no impact on their likelihood to switch, about a third said it would make them more likely to switch
• This is particularly the case among those who are intending to switch or are disloyal to their existing bank (for instance, where there is a ‘push’ factor)
CASS has a more positive impact on certain types of business owners
• More recently established businesses, younger business owners and women are more likely to say that knowing about CASS will have an impact on their switching consideration. However, these same types of respondents are least likely to be aware of CASS
To read the full report, please use the download button for the PDF version.

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