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The 5 best banks for business, as voted for by small businesses and the self-employed

3-minute read

The 5 best banks for business, as voted for by small businesses and the self-employed
Sam Bromley

Sam Bromley

12 March 2019

A survey of nearly 20,000 small business banking customers carried out between January and December 2018 ranks 14 banks. Where does yours come in?

Consumer insight consultancy BVA BDRC conducted the independent survey for the Competition and Markets Authority (CMA). People with a business current account were asked how likely they'd be to recommend their provider.

How did small businesses rank their bank?

Respondents were asked about their provider’s:

  • overall service quality
  • online and mobile banking services
  • small business overdraft and loan services
  • relationship and account management
  • service in branches and business centres

BVA BDRC say the results show “the proportion of customers of each provider who said they were ‘extremely likely’ or ‘very likely’ to recommend each service” to other SMEs.

The top 5 banks based on overall service quality

BankPercentage of customers who would recommend
Handelsbanken85 per cent
Metro Bank71 per cent
Santander67 per cent
Lloyds Bank61 per cent
Barclays61 per cent

Nine other banks round out the rest of the ranking:

  • Yorkshire Bank (57 per cent)
  • Bank of Scotland (54 per cent)
  • Natwest (53 per cent)
  • HSBC UK (52 per cent)
  • Allied Irish Bank (50 per cent)
  • Clydesdale Bank (50 per cent)
  • The Co-operative Bank (50 per cent)
  • Royal Bank of Scotland (46 per cent)
  • TSB (42 per cent)

Handelsbanken is a Swedish export that calls itself a ‘local relationship bank’, adding that each branch operates as a local business that gets to know the market and community.

Metro Bank has perhaps been the most successful challenger to the UK’s traditional banks over the last few years. It launched less than nine years ago and despite coming second in the business poll, it ranked top in BVA BDRC’s separate poll for personal banking.

The top 5 banks based on online and mobile banking services

BankPercentage of customers who would recommend
Barclays76 per cent
Santander73 per cent
Lloyds Bank73 per cent
Metro Bank71 per cent
Natwest70 per cent

Here’s where the other banks placed:

  • Bank of Scotland (64 per cent)
  • Handelsbanken (64 per cent)
  • HSBC UK (62 per cent)
  • Royal Bank of Scotland (59 per cent)
  • Yorkshire Bank (57 per cent)
  • Clydesdale Bank (54 per cent)
  • Allied Irish Bank (48 per cent)
  • The Co-operative Bank (47 per cent)
  • TSB (38 per cent)

The top 5 banks based on overdraft and loan services

BankPercentage of customers who would recommend
Handelsbanken83 per cent
Santander70 per cent
Yorkshire Bank61 per cent
Barclays60 per cent
Natwest59 per cent

Only eight other banks round out the rankings here, because fewer than 100 of Metro Bank’s customers provided an eligible score for overdraft and loan services:

  • Clydesdale Bank (joint fifth with Natwest at 59 per cent)
  • Lloyds Bank (58 per cent)
  • Bank of Scotland (58 per cent)
  • HSBC UK (58 per cent)
  • Allied Irish Bank (55 per cent)
  • Royal Bank of Scotland (49 per cent)
  • TSB (44 per cent)
  • The Co-operative Bank (43 per cent)

The top 5 banks based on relationship and account management

BankPercentage of customers who would recommend
Handelsbanken91 per cent
Santander65 per cent
Metro Bank64 per cent
Lloyds Bank63 per cent
Allied Irish Bank61 per cent

This is how the rest of the banks fared:

  • Barclays (60 per cent)
  • Yorkshire Bank (57 per cent)
  • Natwest (57 per cent)
  • Clydesdale Bank (54 per cent)
  • Bank of Scotland (52 per cent)
  • Royal Bank of Scotland (50 per cent)
  • The Co-operative Bank (47 per cent)
  • HSBC UK (46 per cent)
  • TSB (43 per cent)

The top 5 banks based on service in branches and business centres

BankPercentage of customers who would recommend
Handelsbanken77 per cent
Metro Bank77 per cent
Lloyds Bank60 per cent
TSB57 per cent
Barclays56 per cent

Here are how the other nine banks ranked:

  • Bank of Scotland (joint fifth with Barclays at 56 per cent)
  • Santander (55 per cent)
  • Yorkshire Bank (52 per cent)
  • Clydesdale Bank (49 per cent)
  • Natwest (47 per cent)
  • HSBC UK (44 per cent)
  • Royal Bank of Scotland (43 per cent)
  • Allied Irish Bank (42 per cent)
  • The Co-operative Bank (39 per cent)

What should businesses do if their bank ranks bottom?

As a nation we’re reluctant to switch banks, whether for our personal or business accounts. Last year the BBC reported on the CMA’s investigation into the banking industry in 2016, which found that only three per cent of current account customers had moved in the previous year.

The CMA also said that only four per cent of business account customers move their accounts annually.

But if you’re not satisfied with your current service, switching banks could encourage competition in the industry.

Chief executive of the Competition and Markets Authority, Andrea Coscelli, said: “If people are unhappy with the customer service they are currently getting, I would encourage them to look at the results and think about switching to a better performing bank.”

How do you rate your business bank account? Let us know in the comments below.

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