“Banks have a larger potential customer base for small business banking products than ever before. However, there are gaps in the market that must be addressed. Convincing sole traders of the benefits of business accounts over personal ones is key to growing account numbers.”
– Rich Shepherd, Financial Services Research Analyst
This report looks at the following areas:
- Satisfaction may be high, but trust is low
- Banks need a new approach to self-employed workers
Persuading sole traders and the significant minority of micro businesses that use personal accounts to opt for a business bank account is key to sustained, and improved, growth. To achieve major increases in the proportion of sole traders choosing business bank accounts, banks will likely need to implement some degree of innovation in their products, something which has largely been missing for some time. It could be that the CMA (Competition and Markets Authority) enforces change in the market as a result of its investigation of the competition in the business banking sector.
The dominance of the big four banks is unlikely to be broken up any time soon, but challengers may find that the CMA and FCA (Financial Conduct Authority)make it easier for them to grow at the market leaders’ expense. Banks need to be willing and able to change their products and their approach to small business banking as their customers’ behaviours and attitudes change.
For example, online banking is now the most used service among small business owners. Banks need to ensure as many actions as possible, from account management to loan applications, can be made quickly and easily online. If banks do this, and the economy continues to strengthen and support SMEs, the small business banking market should be set for significant growth in the coming years.
This report examines the UK market for small business banking, specifically small business current accounts. This includes discussion of the size of the market for small business current accounts, with a forecast for the next five years, and a look at major factors which influence the market. The report also examines lending to small businesses.
The report looks at the key players in the market, including market share, company strategies and promotional activity. Finally, Mintel’s exclusive consumer research covers the market in detail. This includes looking at the rates of ownership of small business bank accounts, the services that small business owners use and how satisfied they are with their current bank. The report also examines the length of business owners’ relationships with their banks and their switching intentions, what other products they have, and experience of borrowing and how confident business owners are of obtaining credit now. Finally, the report looks at consumers’ attitudes towards business banking, and towards borrowing.