26 April 2007, 17:06 PM
  • The findings of a report by the Federation of Small Businesses (FSB) show that small business banking is still not good enough.

The FSB surveyed more than 4,000 businesses and looked at the progress made since the Cruickshank Review of 2000. The report also follows on from the recent announcement of record profits by the major banks and allegations of poor customer service.

Mike Cherry, FSB financial affairs chairman, says, “There is a long way to go before small businesses get the quality of service from their banks that they need and deserve. There has to be a culture change within the banks, so that they understand the needs of their small business customers and can then deliver better service for them. The current profit levels of the banks demonstrate that they have the capability to do this.”

On the plus side, the report finds that the situation has improved and 70% of small businesses are satisfied with their bank. But, it also indicates that their needs are not understood by staff and that banks are not fulfilling their commitment to the Competition Commission to offer free banking, or pay at least 2.5% interest on business current accounts and publicise these services.

“The Competition Commission found that the major banks were making £2 billion per year in profits from small business banking. We call on the banks to live up to their undertakings to the Competition Commission, or, if they fail to do so, for the regulators to make them,” Mr Cherry adds.

Small businesses employ 58% of the private sector workforce, contributing 50% of the UK GDP.