22 Feb 2019

Business banking switch scheme


During the financial crisis in 2008 and 2009, RBS received £45.5bn financial support from the UK Government. As a result of this intervention, the European Commission placed a number of state aid measures on RBS to limit distortions in competition that resulted from this state support.

A package of measures was agreed to promote greater competition in UK business banking, and reduce RBS SME market share. Previously, this meant that business and commercial customers of RBS in England & Wales were due to become part of a new bank, Williams & Glyn, to promote competition in the sector, but this is no longer going ahead.

Following the demise of the Williams & Glyn initiative, part of the package promoting competition includes an incentivised switching scheme - Business Banking Switch. This scheme is designed to provide eligible SME customers of RBS with offers that are better than those normally available on the market. Switching banks is not mandatory but eligible customers will be rewarded for doing so. Eligible customers are RBS business and commercial current account customers with an annual turnover of less than £25m who aren’t considered to be in financial difficulty. RBS have already contacted eligible SME customers so that they can register their interest in the scheme.

An independent body, Banking Competition Remedies Limited (BCR), has been established to oversee the scheme and ensure that it is run fairly.

The BCR confirmed that 11 organisations are eligible to participate in Business Banking Switch and offers will be available from nine of these organisations when the scheme launches on 25th February 2019:

  • Arbuthnot Latham & Co Ltd
  • Clydesdale Bank plc
  • Co-operative Bank plc
  • Hampden & Co
  • Handelsbanken plc
  • Metro Bank plc
  • Santander UK plc
  • Starling Bank Ltd
  • TSB Bank plc

A further two organisations are expected to launch offers later in 2019:

  • Monzo Bank plc
  • Nationwide Building Society

Clydesdale Bank has calculated that there are around 203,000 eligible SME customers, and RBS need to migrate a minimum of 120,000 business current accounts to the participating challenger banks listed above, to meet the aims of this competition initiative.

What happens next?

The scheme may provide business customers with an opportunity to change banks and be rewarded for doing so. It is not yet certain what will be offered to those who choose not to switch and remain with RBS or whether the scheme will close once the minimum number of businesses have switched. RBS will certainly have a smaller SME client base and it is likely that there will be changes in relationship managers for those customers who remain.

SME customers seeking to participate in the switcher scheme will need to be registered at https://businessbankingswitch.rbs.co.uk and will be provided with a unique reference to confirm eligibility. Once the scheme has launched on 25th February 2019, they will have access to the offers from each of the participating challenger banks and will be able to choose an offer and commence the switching process.

If you have any queries regarding the switcher process, please contact me on 01793 818300 or send me an email