A website revealing how SMEs rate their bank will allow businesses to "vote with their feet", according to City minister Andrea Leadsom.
The Business Banking Insight (BBI) website shows how SMEs rate the performance and services of different lenders. The site, which went live on Wednesday and is supported by the Federation of Small Businesses and the British Chamber of Commerce, is designed to create greater transparency by sharing the experiences of small businesses. SMEs can compare banks and see who else is out there if they are unhappy with the service they receive.
Speaking at the launch of BBI at an event in central London on Wednesday, Leadsom, economic secretary to the Treasury, said it would be "a wake up call for banks themselves to start to improve services and target better products that small businesses want to see".
"This survey commissioned by the chancellor can play a key role in making financing and banking work better for SMEs. There's a fundamental lack of competition in the banking sector and that desperately needs to change. It's the first survey of its kind to look at the performance of the British banking sector as seen by Britain's own businesses, people who own and run their own companies."
Business Banking Insight is an independent study, carried out by ICM, that has been designed to reflect the experiences of SMEs online. Initially 5,000 micro, small and medium businesses were surveyed and the site will be updated with new survey data every six months. The results identify 74 different lenders. The site uses a five-star rating system and the results can be filtered according to the size of the business, location and so on.
"It really represents a powerful took for small and medium size businesses when choosing a bank," said David Perry, associate director, ICM Research.
During a panel discussion at the launch event, Anthony Browne, chief executive of the British Bankers' Association, said: "All the banks will want to be at the top of the rating system."
According to the survey, sole traders and businesses with one-to-nine employees gave banks an average satisfaction score of 60% for current accounts.
Mike Cherry, national policy chairman of the FSB, said: "It's not easy for a small business or a sole trader to know who is out there. The challenge is getting businesses to know about it and use it as a tool."
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