Small business owners wait almost three weeks to book a face-to-face meeting with a bank advisor and open an account, as new research suggests high street banking is failing to serve Britain’s entrepreneurs.
According to a study of 89 “big five” branches across the country, by small business banking app Tide, the severity of delays in setting up a commercial account could be costing the average small business owner ten per cent of trading in that period – a potential loss of £2,528.
The cash flow black hole could be worth £245m every year to the small business community, Tide claimed.
Commenting on the findings, George Bevis, founder of Tide, said high street banking for small businesses was “inherently slow and outdated”.
“Our new research showcases just how sluggish set up and getting a meeting can be, and the subsequent cost to the business. For many startups, for whom time and money are a premium, this can be critical.
“Both in branch and online, the services big banks offer are not tailored towards the specific requirements of SME banking,” Bevis said in a statement.
For small London-based firms, the wait for a personal meeting with an advisor stretched to five weeks on average, the slowest of any UK city.
Bevis expressed his “shock” at the banking services available in the “UK’s business hub”, and suggested founders could soon be looking beyond the high street.
“Whilst the high street bank’s online offering may be sufficient for consumer banking, the existing online business banking tools offered for high street banks are not good enough. 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 already moving off the high street.”
Despite new online offerings available to small business owners, Metro Bank is one challenger offering an alternative to the big five with a physical high street banking presence.
However, Royal Bank of Scotland (RBS) recently announced the closure of 158 RBS and NatWest branches in response to the shift away from traditional high street banking.
Following a 400 per cent increase since 2010 in the number of online transactions, NatWest announced a new online finance service that claimed to cut down the loan applications process to just three minutes.
Find out how Ben Towers convinced Metro Bank to offer him a bank account at 17 years-old.
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