Business banking, switching and the digital revolution

We've teamed up with the Current Account Switch Service to bring you a roundtable all about switching your business bank account

Small Business has partnered with the Current Account Switch Service to bring you vital information on switching your business bank account.

In this roundtable session, Lawrence Gosling hosts banking experts and small businesses to talk about switching business bank accounts and why entrepreneurs are hesitant about it.

The speakers are:

  • Moderator: Lawrence Gosling, Editorial Director, Bonhill Group plc
  • Liz Barclay, Small Business Commissioner
  • Chris Pond, Chair, Financial Inclusion Commission CASS INED
  • Helen Bierton, Chief Banking Officer, Starling Bank
  • Jo Ainsley, Senior Services Lines Manager, Current Account Switching Service
  • Edwin Rodrigues, Business Manager, Noah’s Ark Media Ltd
  • Frederic Jean-Baptiste, CEO, Customs & Freight Ltd
  • Suelin McCullough, Director, JSGD Ltd
  • James Shadimehr, Director, Garage Nation and Events Management 

They also discuss what businesses need from their bank and why some entrepreneurs are struggling with the shift to digital.

Listen to the audio below:

Or check out the video:

Alternatively, you can have a read through the session in the transcript.

Lawrence: Welcome everybody, my name is Lawrence Gosling and I’m the editorial director of So, today: to switch or not to switch? That is the question.

Actually, the question is: Have you ever considered, as a business owner, switching your business bank account?

Now, we’ve done some really interesting research in conjunction with the Current Account Switch Service. It says, fascinatingly, a couple of key things. Many businesses are still using their personal bank accounts to run their business through. I don’t know – I certainly wouldn’t if I was a business owner myself rather than working for a business. The second one is still after that’s quite a few years, the impression is it is really difficult to switch bank account. So, we’re going to discuss some of those issues today, in the next hour or so in a way, that I think, is going to be really useful and enjoyable because we’ve got some people from the banking side of the equation and we’ve got some business owners.

Lawrence: Let me bring in Jo Ainsley from the Current Account Switch Service. Jo, lovely to see you again, and thank you for joining me. Now, I touched on the research and you and I have spoken at greater length on that in a separate video which people can see after they’ve watched this.

Just go back to some of that research that I alluded to in my introduction about, you know, it’s still fascinates me why people would use their personal bank account to run their business. That was one of the key things that came out wasn’t it? And the reticence to switch.

Jo: Yeah, absolutely. And thanks for having me today, Lawrence. I think that there was some very, very stark output from the research that was done and from the survey and the fact that people still use a personal account to run their business. I am with you – I find that quite shocking and if we like to understand why that is. Why have people not transitioned? There’s so much that they can get this, in addition, if you are running your business through a business account – access to money management applications to relationship managers and that in itself, I think, would help businesses, no matter how large or small they are.

Lawrence: Lovely, thanks for that. Now let’s bring in the banker, Helen Bierton, from Starling Bank. I think it’s right to say at Starling you describe yourself as disruptors. I think anybody watches TV will have seen advertising from you in the last six to 12 months, which is again, obviously a sign of the growth of the business. I think you’re right to say that you’re the fastest growing banking provided for businesses… I nearly used the small businesses expression there.So, there’s £2 to put in the swear jar afterwards. More seriously, yeah, I mean that this is a core part of Starling’s proposition – to try and service and help business owners.

Helen: Absolutely, Lawrence. I’m thrilled to have the opportunity to chat with you today, and with Frederic and Edwin and James. There are so many Frederics, Edwins and Jameses out there running their own businesses. Starling set up as a business itself, just launched five years ago, and we’ve now got just over 400,000 business customers like Frederic, Edwin and James and we’re thrilled to be growing so quickly.

And our philosophy is that banking should make business lives easier – people should be able to focus on running their business and for a long time, I think, businesses have been underserved by banks and we’ve really tried to change and disrupt the way that banking works, as you described, we describe ourselves as a business disruptor ourselves.

Just to pick up on one of the points you’ve made there, why do businesses still run their accounts through personal accounts? Well, we hear a lot of those examples and a lot of it comes down to the fees that they might have to pay on the business accounts. And, of course, one of the areas we came out with and launched is a dedicated sole trader account with no monthly fees for that very reason, so that businesses can properly set up their accounts and run it as a business and then generate so many other benefits, like Jo described, so I’m thrilled to be here today. I’m thrilled to talk about how we can help businesses bank differently and I’m very excited for the session.

Lawrence: Lovely, thank you very much, Helen. Now, let me come across to you Suelin, because I think you’re in this discussion.

In the interesting space, as it were, where you are both obviously a business owner but you’re providing outsourced business solutions and support for businesses similar to Frederic, Edwin and James’.

Your business, for those who are not familiar, JGSD Limited, so we can find you online, as I did last week when we were doing some research.

So, my first question to you, is in the context of the services that you offer, have you had businesses asking you, thinking this is part of the role that your business can play?

Suelin: Absolutely. I mean, thank you for the opportunity to be here. It’s lovely to meet you all. Yeah, I sit a ‘in the middle’ role and because I obviously have my own as a business owner, I have my own banking issues and accounts and things to deal with, but equally I work with the Edwins and the Jameses and start-ups and I’ve worked with quite a number of start-ups.

And so I am actually at the start, when they are coming going, ‘Oh, I have this business idea and I want to open a bank account, and I want to set up accounting systems’ and things like that, so I help them with that. Then equally those who are already established and need a little bit of help with their bookkeeping and pointing in the right direction. So, I actually recommend a lot of services and Starling has been one that I’ve recommended quite frequently.

So yeah, it’s quite a unique position to be in and I really see the importance of really good, effective banking for small businesses, and I am definitely an advocate of one of those do not use your personal accounts and also, even when you have a business account, don’t use it for personal reasons either. I fly the flag of keeping it all nice and tidy, absolutely.

Lawrence: Lovely, thank you for that, Suelin. Chris Pond, let me bring you in.

Again, I think you’ve got an unusual place in this discussion. Obviously, you’re an independent director for the Current Account Switch Service but you’re also part of the Financial Inclusion   Commission.

So, when you look at some of these issues around business banking, particularly for businesses that don’t have a large number of employees, that are relatively young, sole traders. Are there inclusion issues, do you come across situations where people think it’s very hard for them to open a business bank account, so they do end up using their personal bank account?

Chris: To access financial services, not only bank accounts but also insurance policies savings policies, etc, that is so necessary and is more necessary now as a result of the pandemic, which many businesses have suffered badly through. Many have not been able to access, of course, the support measures which were available to take people through the pandemic. Although I don’t recommend, I think I do understand why many businesses do continue to use their personal account and switch between their personal finances and their business finances. That’s partly because many of them, especially through the pandemic, have found that their status is neither one nor the other. You’ve got some people who are moving into an aspect of self-employment to supplement their incomes. Maybe their employment income has declined or has become less secure as it moved into some aspects of self-employment.

And since they haven’t moved wholeheartedly into that, then they end up using their personal account or even their credit cards for that purpose in the meantime. Then there’s some who of course are moving the other direction, those businesses who find that they can’t sustain the self-employment and have to move into some form of employee status.

So, I understand why businesses find themselves in that position. Though as I said, I certainly wouldn’t recommend using personal accounts or personal finances for business purposes.

Lawrence: Lovely, thanks for that Chris. Now let me come to the people running the businesses day-to-day after I’ve spoken to Liz Barclay, the Small Business Commissioner.

But when it comes to the business owners and we’re just going to ask you for some really direct experiences of how you’ve found the last 18 months and address this issue of business and personal   bank accounts intertwined. Liz Barclay, Small Business Commissioner, what have you and your   colleagues found over the last two years, picking up on Chris’ point, have there been situations where people who’ve been forced because of the pandemic into different employment situations, they’ve been maybe starting businesses or what was a small business on the side has now become their main source of income. Has that come with challenges? Is that the issues that you and the team are finding that Small Business Commission? What has been the experience?

Can you hear me, Liz? Maybe not, okay let’s move on. Frederic, let me turn to you for this   question. Last week, you and I discussed some of these issues.

You’ve got your current business, Customs and Freight, and obviously you run other businesses and obviously you’ve worked in financial services before you set up on your own. Just sharing some of your banking experiences in the context of running businesses.

Frederic: Absolutely. I will just say that it’s actually puzzling to me that some business owners use their personal account because it’s actually very easy to open a business account, as long as you have a company set-up – it might be a bit different for a sole trader.

I guess my experience from knowing the banking system and understanding the banking system is that banking for a company is not just banking. It’s about management of money, it’s about invoicing, it’s about accounting. There are things that you want to be able to do to run your business successfully and my challenge is that a lot of current banking or partners that I’m using lack a bit of this 3.0 world that I will call all the applications that you can have, all the intermediaries that you can get by using apps such as accounting apps, invoicing apps.

It’s very difficult sometimes to find a bank, where they could be open to integration with any of the solution will be have a huge selection of partners, but as an entrepreneur you move very quickly to was the best solution sometimes quicker than your bank and you would like to be able to connect your bank account with any of the solutions that you have. I will give you an example which is just a business plan platform where you can create your business plan, your forecast and after you want to link that to your bank account, so you can keep following what you’ve been thinking for your business and see it materialises by linking it to your bank account. So this integration, I guess, it’s still a bit slow on the banking side, in addition to other factors.

Lawrence: Lovely, thank you very much for that, Frederic. Jo Ainsley from the Current Account Switch Service, let me come to you. That was a really interesting expression I think Frederic used there about Banking 3.0.

Have you found, in the course of the research that you and the team have done that perhaps some people still don’t realise how the banking system has evolved. They’re still very much of the view that it’s a little bit of high street base, you have to walk in do everything manually. They don’t realise even the services that you’re offering, it can all be done digitally and, importantly, can be done very, very quickly as well.

Jo: Yeah definitely, Lawrence. We are aware that there’s definitely still a belief that it’s still the main high street banks. Some people are not aware of the of the new digital bank of the new challenger banks.

I think Helen raised a very valid point earlier that there is still very much a belief that everything is the same, and everything absolutely is not the same. All of the banks that are available for business customers offer different things – some will charge you for the accounts, some won’t charge you, some might charge you but you’ll actually get additional facilities, then you would do maybe with another one.

So, I think having the awareness and the visibility of what is on offer out there and what actually works best for you and your business. That’s absolutely critical for every business owner, I believe.

Lawrence: James, let me turn to you. At Garage Nation, obviously, as you said at the outset, you’ve been running a series of events. Predominantly in the UK, for obvious reasons, the last couple of years. They will go back to being abroad, fingers crossed, over the next couple of years or so.

What is your experience? Do you use a single business bank account? Have you run stuff through your personal account? How have you done it as your business has evolved?

James: When I very first started, it was a heavily cash business around 2003-2004.

I didn’t have a huge need for a bank account at the beginning, funnily enough. When I would get any payments in my bank and I’d give my personal name over, the person would look at me funny, assuming I was just tax dodging, which is probably part of the reason why some people do it anyway.

Lawrence: I better butt in just in case HMRC are watching this, James always paid all of the taxes on behalf of his business, it wasn’t tax dodging

James: Exactly. It wasn’t tax dodging, it’s fully up-to-date.

Lawrence: Carry on.

James: Thank you, and then, after that, now you can’t survive without a bank account.

I’ve got different banks for different companies, not for any particular reason, just because that’s the way it panned out. At the moment I’ve got a Lloyd’s and NatWest and a Metro. The Metro one actually opened because of the ease of opening it compared to the other banks, because that was something I needed just to put a Buy to Let property in, and so I just wanted something simple. Whereas if it was a more complicated business, I would have gone to Lloyds because that’s the interface I’m used to and I’m very comfortable with it, but previously I’ve had Barclays and HSBC as well.

Lawrence: Interesting, lovely, thanks for that. Helen, before I bring you in, I know Chris Pond wanted to make a point off the back of what James was saying. Chris?

Chris Pond: Yes – thanks, Lawrence. I just wanted to pick up on the point that James made about the use of cash because, at the beginning of the pandemic, beginning of 2020, we had 20m people who were principally operating in cash, that was their main form of transaction. That is now down to 5m.

Those 5m still heavily dependent on it – they’re going to be in trouble when cash does disappear totally as it will in the in the years ahead. But I think we’ve got to recognise that for many businesses, there was this environment in which people expected to operate in cash and they no longer do, and therefore the need for a bank account – James talked about 2003-4, he didn’t really have a need for an account because he’s principally operating cash for quite legitimate reasons we underline, but that is an increasing imperative for businesses to have access to an account and the services that go around it.

I think, also, there’s the issue about the sense that many businesses feel that they need the support of banks as almost business advisors. Therefore the loss of the high street branches may, for many small businesses, be quite an issue that they like the idea, perhaps, of having access to those services and perhaps are not quite geared up to accessing those services which nowadays are much better online, and I think that that’s an important factor.

Lawrence: Really good point, well made, Chris. Thank you very much. Helen from Starling Bank, let me bring you in now because again you wanted to comment I think directly on something that James was saying.

Helen: It was actually on something that Frederic said, if I can go back to that. So, Frederic talked about lack of a 3.0 world, and I think this is a really fascinating point and I’ll try and bring together a couple of points that Chris and James made, really.

We have moved very far forward in terms of digital in the last two years, driven by Covid – I agree with what Chris has said.

And there’s two things that have really dominated that that trend. The first was to James’ point, the ease of account opening. We had a business, who was running a carpenter and interior design business that he just stopped when Covid happened, but he had the tools to be able to do removals so he pivoted his business, opened up a new business and needed to open an account very quickly. Ability to open an account very quickly and save time is huge for businesses, whether it’s pivoting or opening new businesses and we’ve really invested in that account opening experience of being available is so crucial, so too are those digital connections we’ve moved forward, most of the digitally.

The amount of things we do as individuals and people digitally and through our phones now and the technology has moved on in ways that can give insights and advice, and I agree with Frederic – we should be able to connect our bank accounts. And that’s why Starling have built everything on APIs and we’ve got brilliant connections to Quickbooks and Xero and all the accounting partners.

And we’ve got a developer portal, so people can connect to us as well. This is absolutely so important and banks have got to move forward and use the technology to help many, many businesses like Frederic and James’.

Lawrence: Lovely thanks for that, Helen. Now let me bring Liz Barclay, Small Business Commissioner back in.

Is what some of experiences that you and the team have been hearing from businesses that really    echo what we’ve heard from James and Frederic and maybe some issues alluded to?

Liz: I’m sorry Lawrence if I’m repeating what other people have said.

I haven’t heard some of the conversation it’s been a bit intermittent technologically and I think intermittent technologically is something that we have to be aware of.

Because there are still a lot of small businesses out there that aren’t digital, that aren’t using digital – they’re using the smartphones to make phone calls and send texts they’re not using it for banking purposes or for cloud accounting software etc, so we’ve still got to be aware that those are their needs to help to go digital.

And my concern about the use of the term SMEs is that were lumping them all together. We do tend to say we’re serving SMEs when actually what we’re doing is serving the bigger end of that market, so we need to think about the sole traders, the self-employed, the smaller micro businesses and what their needs are.

A lot of them still aren’t digital and we know that Making Tax Digital is coming down the line, and that will be a big driver for more people to go digital. But there are a lot of people who tried to set up a bank account in the days when it took such a long time you actually had your first contract, got paid your first amount of money and stuck it into your personal account because that was the only account that you have available to you. I mean I’ve been here so I’m not speaking without experience, so you then carry on using your personal account, because actually it works.

You don’t move, you don’t then think about the benefits that having a business account might bring to you, so there are still quite a lot of people in that boat. I have a few colleagues who provide admin services for small businesses, and I know that people find this extremely hard to believe. But one of those told me two weeks ago that she is still getting from her small business clients, invoices written on fag packets. Now I’m not exaggerating when I say that – not the back of envelopes but cigarette packets, and she has a box on her doorstep, into which her clients put those cigarette packets as they’re driving past. She then digitises etc, etc and sends out the invoices.

So we do have to be very careful, because there are a lot of small businesses that are simply doing the business. They haven’t got time to think beyond that. They’re not taking the time to find the right bank account, find the right cloud accounting software or whatever it might be. And we’ve got to really think carefully about how we get them to adopt digital.

I think you know, this goes much wider because it’s also about helping small businesses to get net zero, for instance. Or it’s helping small businesses to use the technology to the best advantage and sometimes the bigger businesses need to take those steps to help them do that and if you’ve not necessarily got a business bank account in the first place, then that helps not going to come from the bank because that’s not where you’re going to look for the help. So we’ve got to be really smart about thinking.

What is it that small businesses need help with and how do we direct them to the right support at the right time for the right business at sometimes there’s just too much choice, too many options and people don’t know what the questions are to ask, so I think we’ve got a big job of work still to do in order to make sure that those businesses can make the best opportunity possible.

These are really creative agile businesses, we are dependent on them, we need them for levelling up, we need them to drive the recovery of the economy.

Lawrence: Lovely, thank you very much. Now Edwin, let me turn to you and your experiences running your   business. Have you ever changed, switched your business bank account, what would prompt you and what was your experience been like with your bank for the last 18 months – two years?

Edwin: Okay, my experience has been quite positive. I think one of the reasons I’m with the bank, which is NatWest, is because I mean initially I had personal banking with them and then, as I moved to a sole trader business.I worked for a couple of years and then I moved to a sole trader business, and it was much easier for me to because, as a sole trader you’re essentially, it’s basically being an individual rather than a limited company which is separate entity, so it was a smooth transition. All had links with each other, but it’s definitely in one app so it’s much, much, much easier to operate.

But I always, believe me, I did a bit of research before starting my sole trader company, whether I should just buy with my personal banking or whether I should start a separate banking, as a sole trader, but it definitely helped me and I’ll tell you why – I was looking for a mortgage in a year’s time but in hindsight, I realised that because I separated my banking, it did help me because I had to show, I mean I had to appoint an accountant to make sure that all my incomes and expenses are properly shown and it was much easier for them to operate and then he also asked me to start a bookkeeping accounting with Quickbooks, so I started with Quickbooks so it did help me to get my mortgage in the end, so I think separating the banking did help me a lot and then eventually after a year to a year and a half, I had to start a limited company because my company was growing.

I was used NatWest and I did I thought you know it’s in my relation has been good with this bank, why not start a limited company with them? To my surprise, the business banking is actually linked on the app with the personal banking and with the sole trader banking, so it’s much easier because you’re already used to operating with that and most of the features are the same, I believe, so it just made life much easier. so overall my experience has been quite good, and even though I do see a lot of – there might be a bit of negative points, but overall it has been good and even though I do get letters to the letterbox of emails if you’d like to switch from personal to business banking.

There’s nothing very enticing for me to move because my experience has been okay so far. I mean it that digital is quite good, but it’s my personal opinion, because I haven’t tried any other banks. I have tried Barclays business banking, which is also good, because I’m a treasurer for my society that I live in so that has been okay, but I’ve not used it that much but I think NatWest has been okay for me, so far, my experience has been good.

Lawrence: Super, thank you very much for that, Edwin. Let me turn to you, Suelin. I’m hoping you haven’t got any clients similar to the one that Liz mentioned about dropping off – I hesitate to call them receipts – in fag packets, but I think we’ve all been in business long enough, in one way or another, and James obviously started in cash, probably some of that cash was probably in carrier bags 10 or 15 years ago.

There were some interesting points that Edwin was making there. Naturally, we’re drawn to organisations, where we’ve had a long-term business relationship it’s maybe just a human thing. Well, we’ll just stay with what we know. It’s easier. But again, he made a good point, we as business and personal it’s interweaves doesn’t it, particularly in context, like mortgages or maybe personal loans for other things?

Suelin: Yeah. I mean I do I’ve had those clients. It made me chuckle when Liz mentioned that because I’ve had those clients that turn up with bags and bags of receipts that they’ve had hidden for like five years or something. You can’t even read them because all the print’s almost gone and you’re trying to decipher what’s on there.

But then I’ve also had the pleasure of working with those clients and moving them to digital. I believe in empowering clients and I think, as much as I love organising people’s lives for them and their businesses, I do want them to be able to do it. If I decided that I was going to retire, please let that happen soon, and if I was going to retire I want them to still be able to access their bank account and know what’s going on, so I do a process of setting up simple cloud accounting software for them so that they can manage it and have that information available to them.

My own personal experience with banking is love-hate and so I’ve been with NatWest for a long time. Then I believe it was last year, there was an initiative, a switch initiative, where there was a financial initiative to switch banks and I did switch and I switched to Starling and the process, yes, is of course very easy. I think if it wasn’t last year, it was maybe it was the year before, because I’ve lost track of which year we’re in with Covid so I did switch and, as I said, the process to switch to Starling is very easy.

I think that’s definitely something that’s a real positive, and I think in the last 12 months I have actually recommended and had about five customers of mine move to Starling or actually set up from the word go to Starling. So, there are a lot of positives there and it takes away the fear because there is so much about, ‘Oh, I don’t know how it goes’, and I work with electricians and plumbers and people, as you say, they just want to get on with the job. I mean literally before this call, I had my electrician going, ‘Oh I’ve got my assessments, I don’t know how to access my emails it’s that    thing where there’s that technological fair about if you put it on the app, how am I going to do it. So it’s made it really easy for them to access banking with the likes of Starling and then I switch back to my love-hate again, which is, in my own personal walk now with Starling I love it – it’s been really good.

Then I get to my business is growing and then you have the Recovery Loan Scheme which I didn’t want £25,000 but that’s all that was on offer, and that was just it. I applied said yes, ‘You pass all the credit checks, wonderful’. Then I got a letter that said, ‘Sorry, we can’t lend you the money.’ Now, bear in mind, I didn’t actually want £25,000. But then that was just it – there is nothing else on offer.

I’m actually at a point in my business where I will also offer property management services and that’s something that I’m looking at taking as a separate on my business, and so I actually want to grow that side. So, I had a bit of a bugbear with Starling on that because I can’t speak to anyone about it. I was just another digital business and, yes, there’s a chat facility, but you don’t want to discuss your business growth on a chat facility, frankly. So, I think for me it’s that middle ground so, on the one hand, that NatWest had any real issues and where there were issues they’ve dealt with it very professionally. So, it’s the business manager element where you can go in and have a conversation and say, ‘This is where I am with my business’ and then equally it’s the digital side of things, where the ease of opening accounts. It needs to be able to go forward from there, and I think that’s a challenge for starting as well. One of my clients and has a real issue with the limit of £500 that you can pay in via the app and it caused a lot of problems because they had a cheque for £3000. The supplier actually had to send it three times because the first time it got lost and the second time there was an issue with the cheque and Starling had to send it back. I do think that that’s something that needs to be improved and while cheque payments are obviously becoming a thing of the past, there are a lot of our smaller businesses entrepreneurs who still take that as a payment – we’re talking cash, we’re talking cheques as well. I think £500 is quite a small amount of really and to be to deposit via the app and then after that you’ve got to send it in an envelope to the poster standing so definitely a challenge for Helen I would say, to take that.

I’ll just sum up because I also am part of a woman entrepreneur community and I threw it out to them, that I was going to be sat around the table and obviously some of the things that came up were definitely the fees. A lot of our smaller entrepreneurs and micro businesses who have clients, we would live in a virtual world, I offer virtual services. Copywriters can work from anywhere in the world, and so they have international clients, the fees that they’re paying on international payments. Then also the normal bank account fees they’ve said, ‘please say something about it’ because it’s really a hindrance to them being able to grow their businesses.

Lawrence: Fantastic. You raised some brilliant points and I’ve seen lots of hands going up so I’m going to do this in order. Liz Barclay’s hand went up first she was quickest on so Liz on some of the things that Suelin was talking about before we come to Frederic.

Liz Barclay: I think Suelin covered a lot of ground there. I just was thinking about the cheque situation and, yes, there are still a lot of businesses that do need access to facilities on the high street in order to put their cash in because they still operate in cash. One business said to me the other day, ‘What is this?’ ‘Cheque.’ ‘What do I do with it?’ so you’ve got two ends of the spectrum there and we’ve got to cater for all of those people who are still operating across that as a continuum isn’t it and we’re moving from one end to the other but we’re not ups, we must be sure we’re not leaving people behind.

But I do think that the big traditional banks are beginning to realise that perhaps they move too far away from not know your business situation that would have happened on the high street when you had a Mr mothering in the in the branch, who would have known everything about your business. It was much easier to go to him and say, ‘I need £5000. I don’t need £25,000, I need £5000’ and work out how to help the business to grow and quite often those bank relationship managers knew that money was the last thing that many small businesses needed. What they really needed was the support and advice that would help them to take the next step.

Quite often, businesses think that by throwing money at it, they can solve all their problems, but really there are other solutions. And I think most of the big banks, certainly, since I’ve taken over the post on July 1 and talk to all the traditional banks. They’re all looking for that move back a bit towards much more relationship-based working with small businesses. I think this is the also the point about SMEs. They are realising that they have got sole traders and freelancers and micro businesses amongst their clients.

So, they’re looking at how to treat them individually and what the personalisation of that relationship needs to be in order to help business get and do its absolute best, and I think there definitely is an improvement in that way of thinking.

Lawrence: Thanks for that, Liz. Now, Frederic, I think you had a couple of points you want to make. I know you and I talked in the past, because the issue of foreign exchange, currency issues, have come up when you and I’ve spoken. Just make the first point you wanted to make off the back of what Suelin made and we’ll talk about the currency issues.

Frederic: I guess foreign exchange make the point, such as cheques as well, which is having a lot of different banks, where you have some that can offer you some features, others can offer you some features and I guess when I look at all the features, my conclusion will be that we never switched banks but we have two or three or four different banks for my business. What happened is that if you want to work locally, we probably use a challenger bank, no problem with that. You want to start working internationally, now you’re looking more the more traditional banks, because they have a stronger infrastructure.

When I was referring to Web 3.0, I don’t think any of the banks are there yet. Yes, they’re putting an app in front of you. Yes, they’re putting a chat in front of you, but it’s related really to what we were talking about with the relationship managers. A lot of banks are doing business banking, but they’re not business banks which is entrepreneurial, you have a lot of resources, there are a lot of smart things that you do.

Can you talk with a business manager, who knows about business, who can help you to progress your business – such as Web 3.0, crypto? You use some of your assets as a collateral to make your business progress? These are really big questions that I’m really demanding about because I’ve got big ambitions for my business, but these are not answered for the moment. All banks are trying to do at the moment is make fees on this and that. They’re not thinking about making businesses work or helping them to grow, so we can become one of the partners.

So, to my point is really strong that the business bank does not exist in the UK, maybe except the British Business Bank. And you have to navigate with a lot of features that are not comparable. If you want to be successful, you will probably have three or four business accounts.

Lawrence: Okay, thanks for that and James let me bring you in. I think earlier in the conversation you    mentioned that you’ve got a number of different accounts and they’ve very much happened as a result of looking around for service that you needed support that, particular whether it was Buy to Let or some of your core festival business.

Do you tend to agree with them until Frederic’s point there that there a lot of those services that you’re seeing as a business owner, entrepreneur, they’re not necessarily directly for businesses, but they provide some of the services that bank that businesses need? So, there’s a slight mismatch in a way.

James: I think I’m probably in a different position to Frederic where my needs from a bank account are very different.

I think Frederic mentioned crypto. That’s one thing I would like to see – a way to accept crypto payments. However, I’m aware that that may come with time and not everything can happen overnight. My personal main need from a business bank account is an easy interface, to be able to view my previous transactions and set up payments from one person to another. The growth of my business wouldn’t really be impacted by having any extra services from the bank, even borrowing money because the growth strategies I have don’t actually really require lending facilities or anything like that. Mine is just more about the simplicity and ease of using the bank account and ease of being able to contact them if there is a problem as well.

Lawrence: Lovely – thanks, James. Helen from Starling Bank, before I bring you in, let me just turn to Jo at the Current Account Switch Service.

Jo, there are a few really interesting things that came out in the last couple of minutes. I saw you    nodding in a few places. One, going back to the research was, you asked some questions around whether a switching incentive, so a fee to encourage people to switch from one account to another, would be part of their decision-making process. Frederic is a tough customer so it’s not going to take a little fee to get him to switch but there’s some interesting points. In particular, I think his point about a business banking or business services – there isn’t really a business bank. Any thoughts on that broader point?

Jo: Yeah, definitely. I think you’re absolutely right. There’s lots of variation available on the market. Whether that variation is visible to people so that they can see that there’s variation for them to get what they need, I think that that is one of the challenges and certainly from the conversations that we’re having here today.

Lots of people are using different banks and different banks are offering them different things. For me, and from the research that we’ve done historically and the conversations that we’ve had historically, the monetary incentive does not trigger the same for a business customer as it does for a personal customer. We absolutely know that the personal customers see the incentive – £100, £150 or whatever it may be – and they jump for that, because that’s a good amount for them. We do have what we would deem ‘serial switchers’. People are watching these offers all the time and they’re quite happy to move their account from one bank to another and wait a few months, and then move again and get another incentive.

Business customers are absolutely not doing that at all. There was the recent business incentive scheme that was run by RBS/NatWest Group. There were lots of businesses that were encouraged to switch their account and there were different types of incentives. Many of the business customers chose not to switch their account so that monetary incentive is not always the thing that moves them.

What we see here in this conversation is every business is different. You might get two sole traders. They’ll be working very, very differently. The banks themselves need to look at what these business customers need and what it is that works for them, and that one size fits all will not work at all.

We have to make sure that there are lots of options, irrespective of whether that’s a high street bank or whether that’s a digital bank. Then the individuals can make the right decision to go to an organisation that will best serve them and support them with their business.

Lawrence: Okay – thanks, Jo.

There are a couple of hands going up. James, I know you quickly wanted to make a point – sorry, Helen – off what Jo was just saying there. James?

James: Yeah, so two of my business accounts are with NatWest and I got offered the switch scheme. I think it was quite good, it was £3000 or £4000 to switch. I was half in shock about it. You’re going to pay me £3000 or £4000 to leave you? And then they explained the reasoning behind it and I debated it until the deadline, and then I decided to move banks, one of the businesses to Metro. Even when it happened, I ended up procrastinating on the decision to the point where I missed the deadline but wasn’t even too bothered about it, because of how important the ease of using the bank is.

With Metro I always had this thing where half the time I go to login and my password wouldn’t work and I thought, ‘I’m sure I’m doing this right.’ Then my sister said the same thing with her Metro Bank and eventually the other day I spoke to them on the phone. They actually said that they have some glitch on their system that if you enter in a password wrong or if you enter something in that when you re-enter it, it remembers the previous one you put in. You can be entering the right password and then it still won’t accept it and you’ve got to reset everything and call them or get a magic word or an email in the post to reset your whole account.

It’s little things like that that have been more important than money. As Jo said, it’s not like a lot of the personal banking customers because there’s a lot more to it than money.

Lawrence: Yeah, lovely. Thank you. It’s a good point. Helen, sorry, my apologies, eventually can bring you in. You’ve probably got a long list of points you wanted to make.

Helen: I’ll try and keep it succinct, but I think the point that Jo made is the really important one here. We’ve got four very different businesses, including Suelin’s, and listening to the variety of experience in the different businesses in the different needs just in the four examples we’ve got here. I think that’s what’s really interesting about business banking is the fact that each business has its own priorities and its own needs. As a bank, we’re absolutely focused on trying to make our service, one that suits everybody.

I do just want to address Suelin’s point. Obviously, very sorry that you were declined, but we do have people available on the end of the phone 24/7 so you can speak to somebody. And I will definitely get somebody to speak to you – very happy to do that.

I think the other point that’s coming out, which is really fascinating for me, is the one thing that I hear time and time again from the businesses that I speak to is that they want their banking to be effortless, reliable and solve their problems. Because actually business owners like the ones on this call today want to run their business whether that’s growth, whether that’s running the business, they want to focus on their business and banking should make lives as simple and effortless as possible.

And linked to that, the CMA (Competition and Markets Authority) tried to bring better competition into the business banking market and have now published the CMA survey results. You can start to hear what other businesses think of the banks, and you can start to see how people rank the service they get.

And you can start to compare the services that are available, and I think that’s something that I would encourage all businesses to do.

Lawrence: Lovely. Thanks for that, Helen. Chris Pond, let me just bring you in at this point. We made some really interesting points about cash and obviously there are a lot of customers, particularly things like plumbers and electricians, hairdressers or whoever likes to pay by cash, or we have a private investor magazine and somebody sends us a cheque last week.

Anybody under the age of 40 in our office didn’t actually know what to do with a cheque which was to the point that Liz made. It was quite amusing. But from an inclusion perspective when there are hundreds of thousands, if not millions of businesses that are struggling with digital banking. Any thoughts about perhaps how you would encourage them maybe to transition and try a bit more digital so they’re not excluded.

Chris: Very much so, Lawrence. The point Liz made earlier was that many, many businesses, are not only financially excluded, but then digitally excluded as well. They don’t have the confidence or the capital, equipment or the services available to really access digital services. I’m very keen that we do find ways of helping people make that transition from a dependence on cash towards digital terms. It’s something that Helen and I have worked on in the past, to see if we can find those digital tools which really do meet the needs of businesses and indeed of individuals using their personal banking services.

At the weekend, I took the kids to a little Christmas fair locally and probably half of the traders, they were all sole traders, they couldn’t operate in anything other than cash. Frankly, I had no cash with me and they lost the sales in those circumstances, so we’ve got to find ways. The services are available now, very often the connectivity is not great, but the services are available and we’ve got to find a way of building the confidence of businesses and giving them the access to those digital tools which really could make a big difference to the prosperity of their business operations.

Lawrence: Lovely. Thanks for that, Chris. Now ladies and gentlemen, there are eight or nine minutes of the discussion. So, final thoughts. Suelin, if you don’t mind, I’ll come to you first.

The classic of the roundtable. What takeaway, what will be the message or learning for an entrepreneur who’s been watching the last 60 minutes? What would you say to that person that patch can help them take their business forward, particularly in the context of what we’ve been talking about?

Suelin: I think that the real positive is that the discussion is happening and that banks are investing time and money and effort into wanting to get it right for us and that’s really positive. I encourage entrepreneurs and smaller businesses and micro businesses to go out and to look, do the research.

 I’m not an advocate of having, like, five bank accounts because it just makes the lives of bookkeepers and accountants and even yourself [more difficult]. You have to then start keeping track of everything, so I don’t think that’s necessarily the answer either. I think the banking industry needs to find that happy medium.

I think you cannot throw the positives of high street banking out and the relationship management. I think the high street banks, and they are already doing that, are becoming more and more digital and trying to rival the likes of Starling so that again it’s good. Even though I have had my one little hiccup with Starling I am still an advocate for Starling and I will continue to recommend them, because I believe that the ease of which and you can open an account and the account is there and it takes away that, ‘Oh, you know, let me just continue to use my personal account’, because it’s pretty easy to set up. I encourage entrepreneurs, small businesses go out and do the research and have a discussion with your bank about what your needs are. And because we’re discussing it, I’m sure there will be solutions.

Lawrence: Thank you, Suelin. Just an interesting balance, as though we’re on the BBC, there are other business bank account providers other than Starling that you’ve been mentioned a few times in the last 60 minutes. But I suspect, for obvious reasons.

Liz Barclay, let me come to you. Final thoughts, really, on the discussion. Is this up to banks to do more? Is it up to businesses to do more, is this the classic were the two sides of this equation need to just, keeping us all productive with each other?

Liz: I think it’s up to us all to do more. We need more confident businesses. We need businesses that know where to look for the help that they need when they need it. We need the banks to make their relationships a priority so that they’re actually working in partnership with businesses to help them grow or not grow with it, as the case may be, because not all businesses want to grow.

But we also need the technology to improve and as it improves it gets much easier for people to use. We need the connectivity as well. I talked to somebody the other day, who said, ‘I run my business on my smartphone The only problem is, I have to stand in the middle of a field to do it.’

Obviously, there are still hiccups in those kinds of processes, and of course as younger people come on board in businesses, they’re bringing those digital skills with them. They’re not scared to ask the questions. They’re not scared to drag a small business into the digital era.

But we’ve also got to remember that we’ve got Making Tax Digital coming down the pipeline in 2024 when small businesses are going to have to be digital in order to pay their tax, etc. So there are incentives there that will push that along and I think we’ve all got to work together to make it as easy as possible for businesses to be digital, but to do their banking digitally but to talk to somebody when they need someone to talk to, and that might be three o’clock in the morning. There’s my challenge to the banks. It’s not just in-bank opening hours that we have crises about our business and want a relationship with somebody who can help, and I think the positive is that the banks are really beginning to understand that they may have moved slightly too far away from the businesses, and they need to readjust that pendulum somewhat.

Helen: Can I just say that I couldn’t agree more with what Liz said? It’s so important and that concept of being there 24/7 for our businesses is vital and long may we see many more businesses growing.

Lawrence: And Helen, can a business like yours cope with that three o’clock in the morning?

Helen: Absolutely. 24/7, 365 days a year, we’ve always got somebody there.

Lawrence: All right, lovely. Edwin, what would you like your banks or potential banks that you may use in the future to be able to offer to help you grow and continue to make your business successful?

Edwin: Like I said, I’m happy about it. The integration sometimes it’s not very seamless so that is what I’m looking for in terms of the bookkeeping. But overall, something that would entice me is, I was just thinking while this is happening, I don’t know if they can offer something like a trial period or something of that sort. I know it’s difficult but it’s just a thought really, because you get trial offers or a demo trial wherein you just look at how user-friendly that particular website is, the app is. It might be a little bit far-fetched but, while the discussion is happening, I’m just thinking, what would actually be nice. But otherwise, it has been quite a smooth ride in terms of for me with my current banking.

For me to think of banking because of the user friendliness and the comfort that I’ve been working with it for such a long time, I do not want to take a risk of moving out to another bank because you never know. There might be a few negatives with NatWest Bank, but it is something that’s manageable by me, I mean that’s something that I can cope with in my business.

Listening to some, ‘my experience is really bad’ like, for example, I have to call them for some particular thing, and you know the waiting time is too long. I do have issues with my personal banking directly with NatWest sometimes, but with my business I’ve been okay, so far, so I think I think it’s got to be a little bit more than that for me to move.

Lawrence: Thank you for that. That’s a really interesting suggestion about the demo period.

Frederic, let me come to you. I mean you’re clearly, if not already, a serial entrepreneur, you will be in the future, I can imagine you’re only going to be doing the business you are currently. What would you like out of the banking system? What does Banking 3.0 look like to you?

Frederic: I think all the points have been mentioned. The question for the banks to realise that we are the centre of the relationship as entrepreneurs and they need to provide a service.

It’s a very traditional industry, we used to have a lot of power in their hands in terms of holding your money and your deposit. But this is changing very quickly as we have seen the digitalisation of money. Obviously, this is our money – we’re creating it via work and creation of products. We should be able to manage it as we wish, as long as you stay compliant with HMRC, for example, in the UK and, at the moment that’s not appearing.

And to get back to the question of switch or not switch and to a point that Jo said that business people are not looking to switch. The reality is that when you have a business running and you have direct debit set up or money coming in, based on subscription you have for from your clients, it will be very difficult for you to switch because you will have to spend a lot of time retying all those connections, so what will happen is that, eventually, you have three or four bank accounts, so you manage your best and you try to take the most of each bank account.

So, I will say the return to the business bank, people in front of you that understand about business that are updated about what is happening in the business world, the financial world and that you can discuss with, to make your business grow is probably what needs to be happening in the banking system. I’m really torn between the old, traditional bank that drive an app and the infrastructure and the challenger banks that are fully digital but, lack a bit of infrastructure and there’s not a clear choice they accept trying to use as many as possible without really receiving this business service yet.

Lawrence: Thank you very much for those thoughts. James, for you is there anything you need or you would like to see the banking system provide to help you grow your business?

James: Nothing that I don’t think will happen over time. For example, the cryptocurrency. Being able to accept payments from there. There’s nothing that I have an issue with on a day-to-day or even year- to-year basis that gives me any concern from my banks at the moment. As long as they keep up with the times as best as possible, and it can’t all be overnight, then I’m very happy.

Lawrence: Good. Well it’s nice to have a happy customer.

So, Helen from Starling Bank, any last thoughts from yourself?

Helen: I just want to really say that I think we’ve got an incredible industry of people who are running small businesses and sole traders, that they really do play a massive role in our economy and it’s been a really tough two years. As a bank, we absolutely want to support all of those businesses, all of those creative people, and I think this has been a really, really fascinating conversation bringing many things out. I just want to say that, absolutely, Starling is using its capability to try and support businesses in that way, and we will continue to grow and do so.

Lawrence: Super. Chris, any final thoughts from you? If you’re not digital at the moment, and the way you operate your business, perhaps be brave and make tiny steps in that direction would be one of your thoughts.

Chris: Certainly that, Lawrence, and also to underline what Helen just said that that those businesses are so essential as we try to rebuild after this pandemic. We need to make sure that they get the support that they need from financial services that they’re able to access those financial services and also that we make sure that there is real choice for them in terms of the accounts that they’re using and that they know what’s available out there and that they feel safe in making a decision to move from an account which perhaps is not providing them with the best service that they need and which doesn’t really allow their business to grow in the way that it could.

Lawrence: Thank you very much for that, Chris. Jo Ainsley at the Current Account Switch Service I’ll leave the final thoughts here. One of which is perhaps to reiterate how easy it is to switch if somebody is thinking about it, but any other thoughts?

Jo: Yeah. I think what I’ve taken from today is I’ve got a real clearer sense around what are the things that stop people from wanting to even consider switching. I think there have been a few discussions here today where he talks about the elongated process of being able to open an account. It’s complicated. It feels like it’s a big task and that in itself just stops people maybe even looking and exploring so that’s something we need to try and have to see where we can understand that a little bit more to see how we can improve on that. Then ensure that the availability of the services there and that people are aware of it is very simple, to use a service to switch away once you’ve chosen where you want to go to. And it will do everything automated for you.

To go back to Frederic’s point around we then have to move, payments coming in, or payments going out, all of that is done for you, that it’s all automated so having the awareness of just how easy the services and how much effort it can take away from the business owners and the banks will deal with that for you, I think it is another key one.

And then I think the other thing for me is, we’ve heard some great stories around what the banks are doing that is really, really good for our businesses. There are some really key areas there that have come out very strong. But we’ve also highlighted a number of areas that there is still a lot more work to do and as Chris and as Liz both said, as we go through this economy and we come in through the recovery, the small businesses have felt that pain massively. The banks, whichever bank is. needs to be here to help to rebuild those businesses and to support them now through that transition, as we rebuild the economy.

I think it’s been a fantastic discussion today and the amount of information that’s been shared has been absolutely wonderful. And it’s certainly opened my eyes into some of the other areas that we need to support with as we go forward and to continue these conversations for some time to come.

Lawrence: Jo, thank you very much for your time and those final thoughts.

To everybody who’s been on the panel discussion today, I’d just like to echo Jo’s thoughts. There are some lively, informative views and comments that came out that I hope to you the audience for that you found it useful. I’m sure it’s triggered loads of questions in your own mind. If it has, please get in touch with your own banking provider. Go and have a look at the CASS website, if you’re, getting to Jo’s point, not entirely sure what it takes to move a business bank account.

You’ll see lots of impartial, independent information. CASS is an independent organisation that doesn’t recommend anybody.

But if you’ve got any specific inquiries, please just post them on the question function that will be part of the website and we’ll try and get them directed in the right way for you. But from me, Lawrence Gosling, and my panel, thank you very much for joining us today.

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