Banks ‘too focused on profits over customer service’ say SMEs

It also reveals that more than half (55%) of SMEs believe that it is not a priority for banks to act in a ‘civilised’ manner.

Respondents raised concerns that bank staff are pressured to make short-term sales to boost low basic salaries, rather than focusing on long-term business development and client relationships.

Relationships are also being undermined by the closure of bank branches and the removal of local managers who understand the specific needs of individual businesses.

An over-reliance on algorithm-based decision-making for loans and investments was also blamed for a lack of personal service.

Philip Acton, CEO of CivilisedBank, said: “It’s clear that SMEs want to see change. Despite many initiatives since 2008, a quarter of executives at SMEs still think nothing has changed in banking.

“As an industry, banking needs to get back to the future and to revisit customer service and personal relationships, something that has been lost over the years. As a sector, banks need to reconnect with SME customers.”

Nick Gould, chairman of the SME Alliance, said that SMEs are the backbone of the UK economy and need support to grow.

He added: “What is clear from the evidence we have seen is that the current status quo isn’t reliable or effective enough if we are to foster a truly vibrant and innovative SME-driven economy.”

CivilisedBank was granted a banking licence by the Bank of England in May 2017, paving the way for it to build its infrastructure and launch to customers in early 2018.

CivilisedBank will serve businesses through savings and loans, transaction banking, overdrafts, current accounts with deposits and foreign exchange. The bank will also address the UK retail market with a range of savings products.

Its network of local bankers will be incentivised to provide one-to-one service to SMEs in their communities, supporting each individual customer using real-time information.

Acton’s comments come amid a number of local branch closures by major banks.

Mike Cherry, national chairman of the Federation of Small Businesses, said: “Many local business communities will be disappointed to hear they are losing their bank branch.

“Almost all our members are using online banking. However, small firms still hugely value the in-person support they receive at branches, particularly when it comes to completing complex transactions and making big financial decisions. For many, these are relationships that have built up over years.”