The final recommendations from the CMA on changes to the retail banking sector are a long-awaited promising step for small firms, but there is still further to go according to FSB.
A promising step for small businesses comes from the long-awaited final recommendations of the Competition and Markets Authority (CMA) and should be put into action swiftly.
The Federation of Small Businesses (FSB) has called for a set of remedies that would empower small firms from the outset of this 21-month investigation, and lead to increased switching and competition across the market.
During this time, the FSB has become increasingly concerned by the dramatic increase in pace of bank branch closures, which they believe is undermining competition in the market. They approve of the CMA’s backing of their calls for further support for affected small businesses, partly through bank generated prompts and alerts.
The CMA has also agreed with FSB recommendations to standardise the information and evidence needed to open a Business Current Account (BCA) and make sure banks produce good guidance to small business customers about them. This will remove some of the burden for small businesses of opening a BCA, as well as making it easier to compare banks and switch more easily to get a better banking deal.
Mike Cherry, FSB national chairman, said: “Today’s banking market does not work well for small businesses. The CMA’s recommendations will help to create a more customer focussed retail banking market by tackling some of the challenges small firms face… We are pleased the CMA has taken forward our recommendations of greater communication and support to affected small business customers, but we now want Ministers to look at further options to protect small businesses’ access to their local bank.
FSB also supports the CMA’s proposals for online banking comparison tools, but warns that safeguarding customer data must be an absolute priority. The CMA has decided to support Nesta’s ‘challenge prize’ and FSB believes Business Banking Insight (BBI), the most comprehensive small business banking resource of its kind, will have a crucial role to play in its development going forward.
FSB will continue to highlight the challenges faced by their members around banking and access to finance. They have already engaged with the CMA and new Economic Secretary to the Treasury Simon Kirby MP, and look forward to working with both.