Changing Your Business Bank

Date: 17 August 2004

Changing your bank is one of life’s experiences which most of us think will be an unbearably long and drawn out affair – so, rather than start the process, many SMEs put up with a bank they are unhappy with, rather than finding a new business bank.

But according to Joyce Duncan , director of operations at Enterprise North East Trust (Enterprise) things have changed.

“Changing banks may not be as easy as changing your stationery supplier yet, but it is getting much easier thanks to guidelines which were published by the Department of Trade and Industry (DTI) in 2003,” says Joyce.

“Prior to these guidelines, banks could drag their heels and make the process a long drawn out affair which discouraged many businesses from changing bank. After all, most SME owners and managers have enough on their plate without undertaking a lengthy administrative process.”

Joyce says, “The DTI guidelines are designed to make it simpler to change banks and lays out what the banks are required to do for their customers – and importantly, gives timescales for these actions.”

“There are many reasons why SMEs choose to change bank,” continues Joyce. “A better rate of interest from a rival bank or a wider range of services such as internet banking perhaps. But many change because they are dissatisfied with the service they are receiving.”

If poor service is the motivator for moving, then Enterprise business advisors have put together a check list to make sure that SMEs move to a bank which can deliver their requirements.

Compare Like With Like

All banks will try to tempt you with their business accounts, but it is important to find out exactly what they are offering. In particular look at the bank charges and the interest paid and see how they compare with your current bank. You may not have an overdraft at the moment, but you should look ahead and find out about overdraft limits and what you will be charged for being in the red.

How Much Does It Cost To Do Business With The Bank?

How much will it cost you for each transaction with the bank – pay ins, withdrawals, online payments and transfers and withdrawing cash and so on. Remember to ask what the interest on business loans would be. On the other hand you should ask if they have periods of free banking for new clients.

Face to Face Banking?

How important is having a branch to you? Many banks are reducing their branch network and encouraging more online banking, but if having a local branch is important to you make sure that your potential new bank is not about to close your local branches. If your location is remote then what provision will the bank make for you if you have to meet them?

Virtual Banking?

Does the bank have online banking? Is it easy to use and can you try it out in the branch? Make sure that you will be able to undertake all the transactions you need to do online easily and swiftly.

Man or Machine?

Even if the majority of your banking is undertaken online, there will be times when you will have to contact the bank by telephone. Will listening to electronic Greensleeves drive you up the wall on hold – or will you be able to contact a ‘real’ person? Test it out – call the potential new bank and try them out. See how long you have to wait before you get an answer.

Facilities and Services

Retail businesses and those trading with cash may require a night safe facility. Check that the bank has this and that it is accessible from your place of work. Ask about company debit and credit cards too as well as merchant facilities if you accept credit or debit payments from customers. If you trade in foreign currency you should ask about arrangements for this too.

Getting Under Your Skin

Does the prospective bank offer you a personal contact which will be responsible for your account? Some banks now guarantee that this contact remain in post for at least two years. Ask if they have experience of your business or industry sector – after all you will need their advice and support as you grow.

“Don’t forget to ask for references too,” comments Joyce. “There is nothing wrong with asking if there is a company within your sector that you can speak to. Networking is one of the best ways of finding a potential new bank too. Ask other businesses their experiences of their business banks. They’ll all have a story to tell!”

“Which online has a website called www.switchwithwhich.co.uk which features information on bank accounts and it’s a good starting point for your research,” continues Joyce. “There is also www.moneyfactsonline.co.uk where you can compare tariffs, charges and rates of interest. www.moneysupermarket.com has a similar facility. Whether an established business changing banks or a new start up choosing a bank for the first time, Enterprise business advisors can help with impartial and professional advice.”

Enterprise offers a one-stop-shop service to the business community across the north east of Scotland, with a wide selection of services available for small and medium sized businesses across the region.  Enterprise can be contacted on 01467 672500 or at www.enetrust.com.

Ends

For further information contact
Beverley Tricker
Tricker PR
Office              01224 646491               
Mobile               07702 363039
Email                btricker@trickerpr.com