The Federation of Small Businesses said the recommendations, which look to improve transparency and make it easier for small and medium sized enterprises to switch banks should help small businesses.
Mike Cherry, FSB national chairman, said: “Today’s banking market does not work well for small business. We welcome the package of measures aimed at boosting awareness of the Current Account Switching Service (CASS). Current levels of switching among small firms are far too low, with only 4% of FSB members switching in the last year. Small business owners are still not confident that switching banking products or services will be a risk-free, seamless process, and as a result, many choose not to switch. A new awareness campaign and measures to make switching transparent are promising steps.
“The CMA has tackled some of the more opaque practices of the high street banks. With £1.2bn charged each year for unauthorised overdrafts, proposals for a maximum fee cap and to introduce prompts and alerts for overdrafts at the end of free banking periods will combat a particularly poor practice that small firms face. This should encourage small businesses to shop around and switch.”
At the Forum of Private Business chief executive Ian Cass said: “Transparency and fairness are at the heart of what the Forum stands for and the drive towards the banks being more open about their pricing, and being clearer about the choices businesses have is long overdue.”