Taking the stress and acrimony out of disputes between banks and their small business customers must be at the heart of a deep rethink of the whole system of managing SME complaints against their banks, according to new findings from an independent dispute resolution body.
Published today are the interim findings of the Business Banking Resolution Service’s study of how a new, more supportive approach to settling disagreements between SMEs and banking service providers could work.
A ‘Live Pilot’, set up at the end of last year, has taken on board over 40 complaints by SME customers against their banks, some arising in the wake of the 2008 financial crisis or even further back, others more recent.
The purpose of the Live Pilot has been to inform a wholly new approach to dispute resolution. It is being conducted by the independent Business Banking Resolution Service, which is being set up by seven participating banks and a group of key stakeholders as equal partners. This comes after the 2018 Walker Review of unresolved SME disputes with their banks, and UK Finance’s response to that.
Commenting on the findings, Lewis Shand Smith, the BBRS’ independent Chair, said: “It has never been more important for British businesses to get fair treatment from their banks. Doing so will, in turn, safeguard the reputation of the sector. The BBRS will play a vital role in making sure this happens.
“In establishing our service, we have recognised the need for a deep rethink of the way disputes between SMEs and their banks are handled. The Live Pilot is adopting a human and flexible approach, as an alternative to the stress and cost of seeking to resolve complaints through the courts.
“The Live Pilot is a significant milestone on the journey to getting the BBRS fully operational for the benefit of all of its stakeholders. We will continue to learn from the Live Pilot as we move towards implementation this year.
“I’d like to extend my personal thanks and appreciation to the SME bank customers who have worked with us on the Live Pilot. The experiences they have contributed will go a long way to helping them and many others benefit from our important public interest mission.
“I’d also like to congratulate the participating banks for their foresight and painstaking commitment to helping us to create this unique new service, which will give added protection to their SME clients.”
Alexandra Marks, Chief Adjudicator at the BBRS, added: “We have been discovering a lot about some difficult and often distressing cases, and the importance of handling these sensitively as well as fairly. When dealing with disputes it is not possible to please everyone all of the time, but our ambition as an independent organisation is to reach fair and reasonable outcomes which bring closure to both parties.”