Small businesses in the U.K. accelerated their bank-switching in the second quarter of 2019, with twice as many small and medium-size businesses (SMBs) taking advantage of the Current Account Switch Service (CASS) compared to the second quarter of 2018.
Reports in Computer Weekly on Thursday (July 25) said Pay U.K., which operates the CASS program, reported that 17,687 small businesses change their banks in Q2. That compares with just 8,000 that did the same during the same period of 2018.
The bank switching scheme first launched in 2013 to promote banking competition and is part of a range of regulatory efforts to strengthen the financial services market. According to reports, the acceleration in bank switching among SMBs followed education and awareness efforts.
“It is right that businesses can benefit from competition in this area, and we are committed to providing a switching service that enables this,” said Pay U.K. Chief Operating Officer Matthew Hunt in a statement. “There can be many benefits gained from switching current accounts and our aim is to continue to ensure that consumers are aware of the options available to them, and to switch providers simply and easily in the event they choose to do so.”
The publication noted the surge in challenger banks targeting small and medium-sized businesses as another industry trend looking to boost market competition. Monzo plans to launch its small business account services, reports said, while earlier this week Starling Bank expanded its current offering for SMBs.
The U.K. has also implemented a program that requires traditional lenders to refer SMBs rejected for a loan to an alternative provider, though that initiative garnered some criticism. Earlier this year U.K. accountancy group the Corporate Finance Network slammed the the Bank Referral Scheme, as the program is called, saying it is “a harmful policy that generates so much cost and bureaucracy.”