Switching financial products is crucial for the prosperity of small and medium-sized businesses in the UK according to head of Businesscomparison.com, Philip Brennan.
He is commenting following the news that the Competition and Markets Authority (CMA) has published a report stating that 57 per cent of consumers have been with their personal current account provider for more than 10 years. This highlights a specific problem in SME banking where entrepreneurs are opening their business accounts at the same bank as their private account, then stay with that bank for business loans. The authority concluded that competition in the marketplace is not currently working properly and highlighted the need for a price comparison site for small businesses.
The recommendations have been welcomed by the banking community who say they’re pro-competition. Paul Pester, chief executive of challenger bank TSB, said they were a “solid first step” but warned there was a “long way to go to bring real competition to UK banking” according to Reuter’s news agency.
Head of Businesscomparison.com, Philip Brennan, comments,
“The CMA’s conclusions match our own observations about the financial marketplace for SMEs which is exactly why we set up. We need transparency not just in banking but across all financial products such as insurance, energy, mortgages and it is vital to encourage businesses to compare in the same way that has become commonplace in many consumer markets. We’re now calling for greater awareness of the need for our country’s businesses to shop around and get the best deal possible on bank accounts and financial products. The CMA have highlighted the need for a business comparison website in the market. This is a move that we wholeheartedly welcome. We would welcome the opportunity to work with the Government to improve support for the UK’s SMEs and drive competition in the banking sector.”