Tide, the mobile-first business banking service has released new insights from its SME community that identifies the top five reasons that they feel high street banks aren’t suitable for the needs of today’s small businesses:
- Setting up a business account is confusing and time consuming: High street banks request endless documents to SMEs before they can start sending and receiving money. If providing proof of ID, tax identification numbers, turnover and capital requirements wasn’t enough, it can take up to 2.6 weeks to set up a business bank account with the big five high street banks according to Tide’s previous research. This is time that a small business cannot afford to waste.
- High street banks are inaccessible: When it comes to trying to visit an advisor at a high street bank; Tide’s previous research found that on average it takes an SME just under three weeks to get a meeting in the UK, with Londoners having to wait on average five weeks (37 days).
- SMEs need anytime, anywhere access: Small businesses, and particularly freelancers and consultants, are constantly on the move for work and they need the banking infrastructure to do things on the go. The innovation that has happened in consumer banking, where now a user can make transfers on mobile rather than just check on funds, hasn’t quite stretched to business accounts. Current online business services do not offer the functionality that SMEs need.
- Foreign nationals struggle to get an account: It is near impossible for a foreign national who has set up a company or is freelancing within the UK, to set up an account. This is a significant problem when taking into account research that estimates 14% of start-up businesses in the UK were founded by immigrant entrepreneurs.
- Traditional business banking is unnecessarily expensive: High street banks charge monthly fees for just keeping a bank account and extortionate fees for additional services, for example when spending money abroad. Once banks have you as a current account customer, they try to cross-sell you their other financial products, which tend to be expensive and not tailored to small businesses.
George Bevis, Founder of Tide, comments: “High street banking for SMEs is inherently slow and outdated for the needs of the modern small business. For many start-ups, for whom time and money are scarce resources , having an easy-to-access and cost-effective service can be business critical.
Whilst their online offering may sometimes be sufficient for consumer banking, the existing online business banking tools offered by high street banks are not good enough for businesses. Now is the time more than ever for SMEs to look to dedicated online and mobile services rather than stick with the traditional banking system that is not meeting their needs.”