An independent review in November, the Walker Review, had recommended new routes for SMEs to challenge banks without having to go to court. As a result, the FCA now plans to increase eligibility for the Financial Ombudsman Service (FOS) to SMEs with a turnover of up to £6.5m in April 2019. The Chancellor outlined the government’s support for this initiative and UK Finance (the Bankers Association) has announced that the banking industry endorse the extension to FOS and have agreed voluntary proposals to deliver fairer outcomes for SMEs. These are;
Providing a voluntary ombudsman scheme offering support to larger SMEs (£6.5m to £10m) that are not eligible to complain to the FOS or captured under the extended scope of the FOS coming in to effect in April 2019;
Backing a historic review of unresolved SME complaint cases since 2008; and
Establishing an independent SME advisory council.
The Economic Secretary to the Treasury wrote to the co-chair of the All-Party Parliamentary Group on Fair Business Banking, setting out the government’s approach to SME dispute resolution in more detail.
The FCA have also just completed their strategic review of Banking Business Models file:///N:/NPA/Banks/FCA%20strategic-review-retail-banking-business-models-final-report%20Dec%202019.pdf
One interesting outcome for pawnbrokers is that whilst the review was primarily about personal current accounts (PCAs), the fact that they are going to review SME business current accounts (BCAs) is positive;
“As a result of this review we will initiate work in 3 areas:
-SME banking, and
-monitoring of retail banking business models.
In addition, we have identified 3 potential areas which may require co-ordinated action in the future to ensure a retail banking sector that works well for consumers: • continued access to banking services • the appropriate use of consumer data • system resilience, and effective prevention of financial crime and fraud.”