Payment of base rate interest on business accounts could contribute £330m to the UK economy
An investigation into the state of the British business banking market by CashFlows, the provider of innovative business-to-business financial services, has revealed that small businesses are collectively spending more than £2.3 billion per year on transaction charges and fees to run their business banking, while simultaneously not being offered the ability to earn interest on their business accounts. The study exemplifies why changes in the services available to small businesses are in need of urgent review to help British business in their efforts to rebuild the economy.
According to the study, which was conducted by YouGov for CashFlows, 24 per cent of small businesses surveyed (over 1 million in Great Britain), pay an average of £1,792 on business banking charges every year, such as transaction fees . Perhaps unsurprisingly, over half of businesses (52%) would move their business current account to another provider in order to receive lower cost business banking services.
Nick Ogden, Chairman and CEO, CashFlows, said: There is widespread demand for a change in the way that businesses are served by the existing financial services industry. Our research clearly demonstrates that there is a considerable gap in the business banking services currently being delivered by British banks and the services that customers actually require. There is a real need, and an ability, to simplify and reduce fees and charges to give businesses transparency and competitive choices.
One of the ways to reduce some of these fees and get to a position where interest could be paid is by consolidating a range of services into one current account. This is an area we have been exploring with our Cashflows Account and already businesses are able to reduce their expenditure on fees, adding interest to this account could directly impact bottom-line business cashflow and stimulate increased expenditure and investment.
Further Information
If you are interested to learn more about CashFlows' Research or the CashFlows Account, email us at: info@cashflows.com.
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 503 Small Business Senior Decision Makers. Fieldwork was undertaken between 11th - 14th June 2012. The survey was carried out online.