Connect with us

Top Stories

Tsb Crisis Doubles The Number Of Small Businesses Questioning The Value Of Banks

Tsb Crisis Doubles The Number Of Small Businesses Questioning The Value Of Banks

As the latest crisis to hit the banking sector saw TSB’s business customers struggling to access accounts or even pay HMRC by the quarter’s VAT deadline,

Research of 500 small and medium business owners, commissioned by Prepaid International Forum (PIF), the not-for-profit trade body representing the prepaid financial services sector, found that just under a fifth (18%) are actively considering financial products and services from a new wave of providers using prepaid platforms.

With current usage of such services running at 13%, this could potentially see their uptake more than double as a result of dwindling trust and confidence in the nation’s banks.

The growth of such services is also being helped by the launch of Open Banking, new legislation that allows customers (including business customers) to tell banks to provide their financial data to properly regulated third parties.

Alastair Graham, spokes person for PIF, says:

“Small business customers have reached a nadir in their relationship with traditional banking partners. Branch closures and the move of services online have meant that few now receive any active guidance or support from their bank in helping to grow their business.

“At the same time, many feel that even basic banking services aren’t meeting their expectations.  Even without issues such as the recent TSB banking crisis, businesses would like improvements to be made. Whether that is quicker account opening processes, simple lending or transparent and fair charges, the demand for alternatives is growing.

“Tech innovations, combined with legislative changes such as Open Banking, mean that more products and services are being launched, designed specifically to meet the needs of small business customers. SMEs have already shown they will trust other providers when their banks fail to provide adequate services. This has been particularly evident where prepaid platforms offer more versatility, while still being a safe, secure and flexible method to transfer money.”

One such company is B4B Payments, which specialises in services to streamline expenses management, helping business customers to transfer funds instantly where required, while also tracking employee spending, tracking errors, fraud and helping ensure accurate VAT claims.

“We have seen over 100% growth in the use of our expenditure management solution over the past year,” said Paul Swinton, CEO, B4B Payments.

“We are a great example of how SMEs will use financial services from non-banks if there is a meaningful benefit in terms of cost reduction and process efficiency. I am sure the recent problems that bank customers have experienced will accelerate the trend towards alternative providers offering modern and flexible systems with genuinely useful functionality.”

Editorial & Advertiser disclosure
Our website provides you with information, news, press releases, Opinion and advertorials on various financial products and services. This is not to be considered as financial advice and should be considered only for information purposes. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third party websites, affiliate sales networks, and may link to our advertising partners websites. Though we are tied up with various advertising and affiliate networks, this does not affect our analysis or opinion. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you, or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish sponsored articles or links, you may consider all articles or links hosted on our site as a partner endorsed link.
Global Banking and Finance Review Awards Nominations 2021
2021 Awards now open. Click Here to Nominate

Recommended

Newsletters with Secrets & Analysis. Subscribe Now