Finance · 12 January 2016

Find out which business banking providers are most favoured by micro companies

Santander came out with the best results for companies with zero to nine employees
Santander came out with the best results for companies with zero to nine employees

Research compiled by Business Banking Insights has shed some light on which banking institutions, high street or challenger, are providing the best services to companies with under ten staff.

While major banking organisations such as HSBC, Barclays and Lloyds all achieved relatively similar scores when it came to grading the experience received by business owners, Santander, Co-operative Bank and Metro Bank led the way.

Business Banking Insights broke the option down into four categories, those derived from businesses with no employees, those with 1-9, those with 10-49 and those with 50-249.

The Business Banking Insights programme was launched by HM Treasury in November 2013 as a way of examining the performance of individual banks. Some 20,000 small and medium-sized British businesses were contacted by way of a telephone survey.

Respondents were asked to rate the service of its main or only bank against a list of 21 individual attributes, providing an overall satisfaction score.

Customer comments for Santander included:

(1) “[It’s] fairly straightforward making deposits. Banking is very easy. Nothing fancy, just what we need. No charges, which is a bonus.”

(2) “Account is currently fee free, which is why [I] would suggest to anyone [with] simple requirements. Online works very well, no complaints. Simple and straightforward.”

Customer comments for Metro Bank included:

(1) “The main benefits are their opening hours, which are 8am to 8pm. They are very approachable and quick to respond to anything I want.”

(2) “I think they are much more customer focused than the other banks. We’ve just been with them for about 6 months. They’re a new bank so they’re trying quite hard. They’re local, they’re very friendly. Nothing special I don’t think.”

The Federation of Small Businesses (FSB), which co-produced the findings alongside Business Banking Insights and the British Chambers of Commerce (BCC), also found that an increasing number of SME leaders are likely to recommend their banks to others.

Firms most likely to report improved satisfaction, the FSB concluded, tend to be young or larger businesses.

Mike Cherry, FSB national policy director and spokesperson for Business Banking Insights, said: “The results show the banks are making some progress in improving their offer to younger and larger SME business customers. They also show how the wider industry can continue to have lessons to learn from newer banks in the market.

“This is a clear demonstration that improving competition in the business banking market can lead and should lead to improved services for all small businesses. We trust all the banks will use these Business Banking Insights findings findings to give business customers the service they expect. We encourage small businesses to go to the Business Banking Insights website to find the banking services that suit their business.”

Below are the results of 16 banking institutions, listed in order of number of respondents for businesses with no employees.

HSBC: (zero staff) 60 per cent – (1-9 staff) 59 per cent

Barclays: 58 per cent – 58 per cent

NatWest: 62 per cent – 60 per cent

Lloyds: 58 per cent – 57 per cent

Santander: 70 per cent – 68 per cent

Royal Bank of Scotland: 60 per cent – 59 per cent

Co-operative Bank: 76 per cent – 73 per cent

Bank of Scotland: 61 per cent – 58 per cent

TSB: 57 per cent – 55 per cent

Clydesdale Bank: 60 per cent– 56 per cent

Yorkshire Bank: 62 per cent – 61 per cent

Ulster Bank: 51 per cent – 51 per cent

Nationwide: 72 per cent – 78 per cent

Halifax: 72 per cent – 52 per cent

Metro Bank: 74 per cent – 73 per cent

Handelsbanken: 72 per cent – 86 per cent

If you have an opinion on your banking services provider then please let us know about it in the opinion box below.

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ABOUT THE EXPERT

Hunter Ruthven was previously editor of Business Advice. He was also the editor of Real Business, the UK's most-read website for entrepreneurs and business leaders at the helm of growing SMEs.

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