RBS Business Banking Switch Scheme: Should I Switch?

Posted by Emma Robison on Mar 21, 2019 6:00:00 AM
Emma Robison
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It’s Starting - The Banking Switch Scheme Update

Have you heard about one of the great secrets in the banking world? The Business Banking Switch looks set to create seismic shifts in SME banking, but a lack of publicity means that it is a quiet revolution. If you currently bank with RBS, read on.

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The Business Banking Switch: A Background

When the world was upended in the 2009 banking crisis, the Royal Bank of Scotland (RBS) required a £45 billion bailout. The terms of that agreement included a commitment to enliven the business banking sector by actively reducing the market share of RBS. This is currently dominated by the Williams & Glyn operation, which is the SME banking portfolio of RBS.

In 2017, the proposal was finally approved by both HM Treasury and the European Commission. Eleven banking partners have now been given the green light to engage in healthy competition with RBS.

Known as the ‘Business Banking Switch’, businesses that were part of Williams & Glyn are being offered ‘dowries’ to move elsewhere. These can be up to £50,000, depending upon turnover. Other incentives include help with additional fees, such as valuations. In total, RBS has a £350m pot to tempt businesses to leave.

RBS is also pumping £425m into ensuring that rival banks are ready to embrace new SME clients. Known as the Capability and Innovation Fund, this capital is for building infrastructure, training staff, and broadening services.


Who Is Involved?

Both rival banks and businesses are excited by the opportunity. Clydesdale Bank has already invested £12m to ensure that the scheme is a success, and other banks are expected to announce their updates as 2019 unfolds. TSB, which is still recovering from an embarrassing IT headache, has grasped the opportunity with relieved enthusiasm and is expected to be a highly competitive player.

The eleven firms include:

  • Arbuthnot Latham & Co
  • Clydesdale Bank
  • Co-operative Bank
  • Hampden & Co
  • Metro Bank
  • Monzo Bank
  • Nationwide
  • Santander UK
  • Starling Bank
  • Svenska Handelsbanken AB
  • TSB Bank

Book a FREE business finance consultation with BFS today!

Monzo is an interesting inclusion. Founded in 2015, the small venture is an app-based bank that incorporates algorithms to monitor financial health. Currently targeting the domestic current account market, Monzo’s move into the business sector looks set to be an interesting one.

It’s Starting - The Banking Switch Scheme Update 1


Should I Switch?

Banks are likely to offer tempting short-term rewards, and these might be ideal for some businesses. However, it is advisable to ask a neutral third party for financial advice if you are considering switching. Long-term planning can easily be forgotten amongst a sea of offers.

Whether or not you decide to switch, it is worth following the links to see what RBS and other banks are offering. These deals are being rolled out throughout 2019, so check in regularly to see what’s new.

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