Banking Competition Remedies (BCR) has revealed where UK small and medium-sized enterprises (SMEs) have moved their business banking to, following the June closure of its Incentivised Switching Scheme (ISS).
The aim of the scheme, launched in February 2019, was to encourage some business banking away from Royal Bank of Scotland (RBS)/NatWest and increase competition in the SME market.
BCR’s data shows Virgin Money was one of the biggest gainers under the scheme, attracting 15,946 business current account switches. This equates to nearly one in four switches (23%) through the scheme, which ran for 28 months.
We’re proud that almost one in four switchers decided that our business banking offer was best for their business.”
Gavin Opperman, Virgin Money
Virgin Money also attracted the majority of business lending switches, accounting for 49.5% of lending that moved from RBS/NatWest.
Last September, Virgin Money was awarded £35 million from the BCR’s Capability and Innovation Fund, which it is matching with equivalent investment. This is being used to transform the bank’s business current account to create a “market-leading proposition” that will launch later this year.
Due to Virgin Money’s successful participation in the ISS, it has been awarded an additional £8.9m from the scheme surplus, which will be used to encourage further account switching activity throughout the remainder of 2021.
We’re confident we can attract more customers and further improve competition in the sector.”
Virgin Money business banking director Gavin Opperman said “We’re proud that almost one in four switchers decided that our business banking offer was best for their business.
“The scheme was set up and run very smoothly by BCR and it has enabled us to expand our presence more broadly across the UK, reaching a new range of customers and supporting our ambitions for the future.
New study suggests smaller Scottish firms will struggle to access funding
“Our recent rebrand to Virgin Money Business and continued improvements in our support to help businesses flourish mean we’re confident we can attract more customers and further improve competition in the sector.”
BCR was established to implement “remedies” agreed between the UK Government and European Commission (EC) following the EC approving state aid measures for Royal Bank of Scotland Group – now NatWest Group – in the wake of the 2007-08 financial crisis.
