Digital banking platforms outperforming traditional banks on service

Digital banking platforms are still relatively new to the market but are gaining the trust of small and medium-sized businesses.

SME survey results show that digital banking platforms continue to outperform their high street counterparts when it comes to service.

An independent survey carried out by BDA BVRC between July 2021 and June 2022 was published on request of the Competition and Markets Authority (CMA). The survey asked customers of the Great Britain’s 15 biggest current account providers to ask if they would recommend their provider to other SMEs in Great Britain.  

SME customers with business accounts were asked how likely they’d be to recommend:

  • Their provider
  • Their provider’s online and mobile banking services
  • Their provider’s services in branches and business centres
  • Their provider’s SME overdraft and loan services
  • Their provider’s relationship account management services to other SMEs  

The results show the proportion of customers for each provider who said they were ‘likely’ or ‘extremely likely’ to recommend their provider.

Around 1,200 customers a year are surveyed across Great Britain for each provider. The
results are only published where at least 100 customers have provided an eligible score for
that service in the survey period – 18,001 people were surveyed in total.

The results echo responses from previous surveys, which are done twice a year.  

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Who provides the best overall business banking service?

The survey results are listed in the table below.

RankProviderScore (%)
1Starling Bank83
5Metro Bank64
7Lloyds Bank58
10Bank of Scotland53
13=Virgin Money43
15The Co-operative Bank40

Starling, Monzo and Tide also ranked in the top three (87 per cent, 84 per cent and 75 per cent respectively) for online and mobile banking services. As for overdraft and loan services, Handelsbanken came out on top with 72 per cent, followed by RBS and Santander taking joint second place with 58 per cent. Starling, Tide and TSB were excluded because they didn’t have 100 respondents while Monzo doesn’t offer an overdraft and loan service.

On relationship and account management, Monzo and Starling took second and third place with 81 per cent and 74 per cent respectively but Handelsbanken took the lead once again at 83 per cent.

Of course, the digital providers didn’t factor into the branch and business centre performance. That went to Metro Bank (71 per cent), Handelsbanken (65 per cent) and Bank of Scotland (57 per cent).

Mikkel Velin, co-CEO of YouLend, said: “The Competition and Markets Authority’s (CMA) latest rankings shows that many businesses are moving on to forward-thinking lenders out of necessity, as incumbent lenders are simply no longer fit for purpose. But the untapped potential of fintech challengers is yet to be unlocked. For real improvement in business financing, we need a complete overhaul of how SMEs receive and pay back financing.

“A whole re-think of traditional financing practices around assessment and repayment is needed. Some businesses are already taking advantage of financiers who offer innovative data assessment techniques to assess credit worthiness and repayment terms, and we anticipate this will continue to grow in popularity as businesses seek fairer financing terms.

“If lenders show greater flexibility in their core offerings and approach to business financing, it’s only a matter of time before businesses reward them with long-term loyalty. Those that make this change will have no trouble getting to the top of the CMA’s next bi-annual rankings.”

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Anna Jordan

Anna is Senior Reporter, covering topics affecting SMEs such as grant funding, managing employees and the day-to-day running of a business.

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