Small business owners preparing to open or switch to a new business current account can now do so more easily, as account providers now require the same basic set of information from new customers.
The streamlined checklist is included in a new online guide launched today by UK Finance, providing the essential details and documents that most businesses will need to open an account, so those applying can be ready for their first bank meeting.
UK Finance has worked with business bank account providers1 to agree the basic set of information that each bank needs from new customers to help them open or to switch a business current account.
Any small businesses wanting to open or to switch a UK business current account can now search ‘Business Account Checklist’ on their chosen bank’s website to access the guide or visit the UK Finance.
Stephen Pegge, Managing Director of Commercial Finance at UK Finance, said:
“Opening a business current account is an important step for any business and we want to help ensure that the process is as simple as possible. The new guide we’ve developed with the banks aims to make the process easier for businesses, saving valuable time and effort by ensuring that all the information required is available so they are prepped and ready before the initial meeting takes place. We believe that this will in turn help to promote greater choice and competition in the business current account market.”
The Competition & Markets Authority (CMA) identified that the account opening process was a barrier to switching for some small and medium-sized businesses in its investigation into the retail banking market. To address this issue, UK Finance developed a new online guide which helps to standardise and simplify the information required to open or switch to a new business current account, in association with business bank account providers operating in the UK. The new guide is not part of the application process but is a checklist to help customers prepare themselves to open a business current account.
The new online guide is one of a series of initiatives set out by the CMA to increase the level of choice and competition in the current account market for small businesses and consumers. In addition to the new online guide to help small businesses open or switch a current account, the other remedies unveiled today concern the development of an SME loan price and eligibility tool, overdraft alerts with grace periods and transaction history for customers.
Over the past two months, progress has been made on another significant remedy for small businesses. In December 2017, the innovation charity Nesta, selected its ten prize winners at the conclusion of Stage 1 of the‘Open Up Challenge’. Each of these FinTech organisations received a £100,000 cash award for developing products assessed as most likely to have a positive impact on UK small businesses in 2018 and beyond.
- The 18 business current account providers are:
- The guide will apply to new or existing business that:
- Have a turnover of less than £6.5 million per year;
- Have a straight forward and clearly defined ownership structure; and
- Are based and operate in the UK.
If they are unable to access the internet themselves, bank customers will be able to obtain a copy either in participating bank branches or from other sources such as a public library or their accountants.
The guide is not part of the application process but is a checklist to help customers prepare themselves to open a business current account. While it contains the essential information that all banks will most likely need to open a business current account, the chosen bank may ask for additional information, either for regulatory purposes or if customers need other products and services (like overdrafts).
- UK Finance is a new trade association which was formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation brings together most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and The UK Cards Association.