The Royal Bank of Scotland is to extend its incentivised business switching scheme to a further 200,000 businesses and roll back the deadline for account switches to other banks by six months as the Covid crisis and Brexit uncertainties shake the confidence of UK SMEs.
The Incentived Switching Scheme (ISS) was established as a condition of a state aid packages given to RBS during the financial crisis, under which the bank would allocate funds to encourage account switching to challenger banks.
Part off a wider effort to inject an element of competition into the business banking sector, the latest figures from the Banking Competition Remedies Board (BCR) managing the fund indicate that many SMEs are staying put as the economy shrinks.
As at the end of May 2020, 34,537 customers had switched through ISS and a further 6,351 were 'in-flight'. But the with the numbers declining, the BCR has extended the deadline for applications until the end of February 2021 and customers will have until the end of June 2021 to complete the switch. As a further incentive, the dowry awarded to SMEs who make the switch will also be enhanced.
Brendan Peilow, BCR lead director on ISS commented: “The chance now to extend the ISS timeline and give access to a larger number of customers, offers the best opportunity to sustain momentum towards the ambitious targets put in place at the outset of the Scheme in a very different economic environment. While switching is understandably not top of SMEs’ ‘must do’ list at the moment, BCR’s recent enhancement of the Scheme for those looking to switch is now available for longer to assist those who are considering transferring their accounts in the months ahead but have more pressing priorities right now.”