Traditional banks risk losing small business customers
13 August 2001 | 3143 views | 0
Traditional banks look set to lose touch with new small business customers, according to the latest Business Barometer findings from Alliance & Leicester.
As a new breed of younger, demanding small business owners arrives on the scene, traditional banking services are likely to lose favour, with the small business adviser polling only 8th amongst the top ten services considered useful for small business banking.
These findings come from the Alliance & Leicester Business Barometer – a new quarterly survey into the attitudes to small business and enterprise among prospective and established business owners. Alliance & Leicester asked a GB representative sample of 2000 consumers which of the banking services currently available to small business would be most helpful.
Around the clock banking advice topped the polls with one in four people saying that this would be the most useful service for small businesses. The study found that difficulties in obtaining appointments with branch-based advisors and inflexible hours are driving the demand for 24-hour telephone access.
A self-help guide for small business came second in the poll with 16% of people rating this as the most useful product. Interest on current accounts completed the top three with a 15% rating.
This comes at a time when major banks are not paying interest on standard business current accounts, creating a "£90 million black-hole" in lost interest payments every year, says A&L.
The younger generation (16-24 year olds) rated online banking as a more useful service compared to other age groups, as did people in the North. The Welsh slammed business banking services with more than half of the respondents saying that none of the banking services offered would be useful for small businesses.
Lynne Turner, director of Alliance & Leicester business banking, says: "With a new breed of small business owner making a charge on the market, banks will need to adapt. Although the traditional small business adviser may not be on the way out, our research shows there is a definite shift towards service and advice 24-hours a day to reflect the dynamism of the small business sector."