Commenting on the Competition and Markets Authority’s final report on the retail banking market, Suren Thiru, Head of Economics and Business Finance at the British Chambers of Commerce (BCC), said:
“The CMA’s final report is likely to be met with a mixed response from the business community, but there are some initiatives that will help boost competition. We are pleased, for example, that the CMA has backed Business Banking Insight (BBI), a website that enables SMEs to compare the quality of service from different finance providers. This will help stimulate more competition for business customers by enabling firms to make more informed decisions about their business banking requirements.
“However, even after this exhaustive investigation, the report pulls its punches in some areas. The report fails to address the structural problems in the provision of business finance, which are holding back some of our most dynamic young firms. The CMA must also tread carefully in the sharing of data by finance providers via the Open Banking programme, to ensure that businesses retain control over who has access to their data – otherwise any trust between lenders and businesses could be destroyed.
“This report must be the start, rather than the end, of the drive to improve competition and greater choice in SME banking, as our recent survey work has shown that awareness of alternative funding options is low among businesses. The government must also address some of the deep-rooted problems in the provision of finance, such as the availability of long-term patient capital. Finance providers should actively promote the initiatives endorsed by the CMA too, if we are to see real change on the ground for business banking customers.”