B2B Payments

UK FIs Take Another Step To Compete With FinTechs

Several U.K. banks have reportedly standardized the onboarding process for new small business (SMB) customers, adhering to regulators’ efforts to ease bank-switching, another move by the traditional financial services space that could help it compete with the growing population of challenger banks.

A press release said 18 banks have committed to standardizing the process through which SMBs can sign up for a bank account, streamlining the information they need from applicants and collaborating with U.K. Finance to develop an online guide for small firms. The guide includes a checklist of information and documentation SMBs need to sign up for or switch bank accounts.

“As operators of the Current Account Switch Service, we welcome today’s announcement and believe it is another important step toward simplifying the account opening and switching process,” said Bacs Director of Product and Strategy Anne Pieckielon in a statement. “We know that small business owners are busy enough without the need to deal with further layers of time-consuming admin, which, in many cases, could deter some from getting the very best deal from their business account.”

The announcement noted that the U.K. Competition & Markets Authority recently highlighted the challenges SMBs face when trying to switch banks after investigating the financial services sector. The press release did not identify which banks have standardized the onboarding process.

The U.K. market has given rise to a slew of challenger banks and FinTechs, several of which cite this hurdle for SMBs and promise streamlined, faster sign-up processes for small business customers.

“Sole traders have been neglected by the mainstream banks who focus on larger businesses,” said Countingup CEO and Founder Tim Fouracre in a statement last month announcing the FinTech’s launch in the U.K. “Often sole traders are forced to use personal accounts because the process of setting up a business account is arduous, slow and expensive. This creates a huge headache when trying to make sense of your business finances.”

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