One in three small and medium sized enterprises are now using two or more banks to provide services for their business, a survey has revealed.
In a recent study, Santander Corporate Banking found that in the past three years, there has been a 14% increase in firms using multiple banks, which is believed to have been driven by the recession.
Over half of the firms which have multiple banking relationships say they have moved because of the need to spread risk in case of bank failures following the government bank bailouts.
Steve Pateman, head of Santander Corporate Banking, said: “Businesses have traditionally had one banking partner which has acted as depositor, creditor and guarantor.
“However, we are increasingly finding that this role has changed and become more fragmented as the overall level of service offered by many banks has become less flexible in meeting the needs of their corporate and commercial customers.”
The research also revealed that 44% of the firms that use more than one bank changed provider in order to take advantage of more competitive interest rates, while 43% are shopping around because their main bank does not offer the right products for their business.
Pateman added: “It is important that businesses wishing to work with more than one provider establish a banking group that takes the time to fully understand their business and reflects their individual needs.”
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