What you need to know
According to the Department for Business, Energy and Industrial Strategy (BEIS), the UK was home to 5.46 million small businesses in 2016. This makes the small business community a huge target customer base for retail banks offering business accounts.
Small business banking is a growing sector, with the value of deposits having grown significantly in the last five years. However, there are challenges to overcome. Notably, the market suffers from a distinct lack of differentiation and customer engagement, as noted by the Competition and Markets Authority’s (CMA) Retail Banking Investigation. At the same time, concerns over the uncertainty caused by Brexit are spreading caution among small business owners.
This Report covers the UK market for small business banking. This includes an examination of the size of the market and five-year forecast for the value of the value of small business bank balances. The Report also investigates the main market drivers, composition of the market share, and providers’ competitive strategies. Mintel’s exclusive consumer research looks at issues including the type of account used by business owners, their short-term business plans, preferred channels for accessing banking and general attitudes towards small business banking.
Products covered in this report
There is no single definition of a small firm, mainly because of the wide diversity of businesses. However, the Department for Business Innovation & Skills (BIS), which was replaced by the Department for Business, Energy & Industrial Strategy in July 2016, used the following definitions:
Microbusiness: 0-9 employees
Small business: 10-49 employees (can include microbusinesses: 0-49 employees)
Medium-sized business: 50-249 employees
Large business: 250 employees or more.
British Bankers’ Association (BBA) data defines a small business as having an annual debit turnover of up to £1 million/£2 million (note: different banks use different turnover criteria).
For the purposes of the fieldwork conducted for this Report, Mintel defines small businesses as those employing 100 people or fewer.
