Seven in ten small firms are open to switching banks

A new survey of UK small business owners has found that 69% of those polled said they would consider changing banks this year, as many seek new ways to grow their business.

A poll of over 2,000 SME decision-makers conducted by Censuswide for the Current Account Switch Service has found that changing banks could be on the cards for many small firms in the UK this year, with 69% of business saying they are open to switching.

The findings show that 36% of small businesses have never switched banks; however, the research suggests that this inertia may soon become a thing of the past as business owners increasingly follow online experts and social media influencers to learn about financial hacks and get the best deals.

Survey respondents said that lower fees (29%), competitive interest rates (27%) and better customer service (24%) were the key reasons to switch banks. By far the biggest consideration, however, was access to in-person services, with nearly half (49%) of those surveyed saying that they would not use a digital-only bank because they want to be able to speak to a bank employee when they need support.

Choosing a business bank account

The survey data also reveals that 29% of SME decision-makers currently use a personal current account to manage their business finances. And over a third (35%) of them use the same current account for their business and personal finances because they say it meets their business needs. The findings suggest that business banks could do more to market their services to business owners who may not be aware of the benefits that come with many business bank accounts, such as accounting apps.

The findings also highlight a significant generational divide when it comes to attitudes to business banking. Respondents aged between 18-24 and 25-34 were more likely (75% and 71%) to consider switching, compared to just over half (52%) of those aged over 55.

"The beginning of a new year is a great time for reviewing finances, whether as a consumer or a business owner, and it's promising to see that many decision-makers for small businesses in the UK are factoring in their business banking as part of this process. As our network of associated banks and building societies continues to grow, we hope this gives small business decision-makers an increased sense of assurance and broader options when making the decision to switch to a new provider. We at the Current Account Switch Service are proud that the easy, free and guaranteed nature of our service can alleviate any stress around switching to a better current account provider and we too are optimistic that the service can support SME owners in reaching their 2024 goals." John Dentry, Pay.uk.

The Current Account Switch Service is free to use and a switch will be completed in seven working days. SMEs with a turnover of up to £6.5 million can switch their current account provider using the Current Account Switch Service. This extends the reach of the service to 99% of the UK's SME market.

Written by Rachel Miller.