Resilience of the Business Banking Sector

Resilience of the Business Banking Sector

The Group is now turning its attention to the wider SME banking and finance sector which like so many other industries is facing unprecedented challenges. The Group will be concentrating on the evolution of the business banking industry in response to the economic challenges associated with the COVID-19 pandemic and climate change to ensure that the survival and wellbeing of business is prioritised and the mistakes which left so many business-owners in damaging and unfair situations are not repeated. We will be reviewing responses and encouraging a move towards a strong and diverse business banking market.


SMEs are truly the lifeblood of the economy. Almost 6 million SMEs in the UK provide economic dynamism and contribute to 51% of all private sector turnover in the UK. As a result of the APPG’s past focus on Dispute Resolution, the Group has been instrumental in both expanding the remit of the Financial Ombudsman Service to include more SMEs and establishing the new Business Banking Resolution Service (BBRS) which it will be monitoring closely.

The business banking market is expanding with a diverse range of providers offering a diverse range of banking options. However, the market is heavily concentrated with 85% of business current accounts and almost 90% of business loans being provided by the UK four largest banks. There is a general lack of awareness amongst SMEs that a diverse range of banking and financing options exist. This is thwarting competition and innovation in the sector, at the expense of SMEs who may not be accessing the most appropriate financial products to enable them to survive their early stages of life and thrive going forward. Given significant challenges ahead, the resilience of the business banking sector is at risk which in turn impacts on SMEs who need a strong offering of support from their bank. This is why the Group is launching this new stream of work with the aim of promoting the resilience of the business banking sector and most importantly the strength of its support for business customers.

Project Objectives

  • Identify and reduce the barriers which restrict SMEs from accessing finance and promote quicker and more efficient financing decisions.
  • Closely monitor and respond to fundamental changes in the business banking sector.
  • Increase SME awareness of banking & financing options & improve the financial education required for SMEs to select the most appropriate option.
  • Increase competition in the SME banking marketplace and ensure that regulation is proportionate and pro-competition.