The transparency of the UK business banking market has dramatically deteriorated, a leading academic has found.
A report, authored by Professor Francis Chittenden of the Manchester Business School, and unveiled at the Houses of Parliament today, focuses on the level of information available to business owners who are considering switching banks.
It suggests that businesses are being put off switching banks because it takes an estimated three days’ work to ‘wade through the complicated myriad of fees and tariff structures’.
“Checking the terms of banking arrangements is an impossible exercise unless business owners are prepared to take advice from experts, such as accountants, or to meet with a range of banks to collect information,” said Professor Chittenden, professor of small business at Manchester Business School.
“Business owners are sceptical of whether comparing the different rates of bank charges is a productive way of spending three days,” said Chittenden. “They want security so that they can get on with running their businesses.”
Chittenden suggested that in many cases, charging structures are too complex even for the banks’ own staff. Also, different rates are quoted on the phone from some banks’ webpages, Chittenden explained.
His report concluded that while new technologies, such as the internet and telephone banking, are increasing the competitiveness of the market, they add to the complexity that business owners face when choosing the most appropriate bank account.
© Crimson Business Ltd. 2006