A new blog post from U.K. challenger bank Tide claims the company has officially secured 1 percent of the small business banking industry, signaling continued growth for the FinTechs challenging mainstay traditional banks.
“We are thrilled to announce that after only two years of operations we have secured 1 percent of the [SMB] banking market,” the company said in its post on Monday (Dec. 10). While it’s unclear how Tide came that conclusion, or how it has calculated the value of the U.K. small business banking industry, the company’s growth over the past two years reflects the rising impact of alternative players and FinTechs in a small business banking landscape dominated by large FIs.
The U.K. SMB banking market has experienced significant changes and turmoil in those two years, too, as government officials crack down on big bank misconduct against small business clients. The government has also taken measures to promote bank switching and to boost competition for small business financial services, for example with the requirement for Royal Bank of Scotland to allocate $1 billion in a fund for financial services startups. The deal is part of an agreement RBS made with the government to retain its subsidiary Williams & Glyn.
Earlier this year Tide spoke out against the government’s requirements for non-bank institutions to compete for a portion of those funds, arguing that they were too strict and may actually harm competition.
“Expanding the package’s eligibility will make the most of the once-in-a-lifetime opportunity to shake up [small business] banking by introducing real competition,” the firm’s CEO Oliver Prill said in a statement at the time.
In Monday’s blog post, Prill again emphasized the importance of boosting competition in the small business banking industry, noting that Tide’s ability to obtain 1 percent of market share reflects the need for better small business financial services.
“We are now a scale challenger to the big banks that dominated and failed the U.K. [SMB] market for too long,” he stated. “Our members come to us because they want a dedicated and focused partner that will help them grow their business. They are tired of the terrible customer service and bureaucracy of the High Street banks and hanging over their hard-earned money in unnecessary, and often hidden fees.
“There is a revolution underway,” he continued. “2019 is set to be another year of growth as more and more [SMBs] choose Tide and we look to add to our portfolio of products and services.”