What you need to know
Small businesses are the backbone of the British economy, representing 99% of all firms in the private sector and accounting for a third of private sector turnover. While the value of small business deposits continued to grow in 2018, the small business population fell by 0.5% in perhaps the first sign of the impact of Brexit uncertainty.
There is significant potential for growth in the small business banking market, as just 59% of business owners say that they actually use a business current account. Converting those who choose to use a personal account instead remains a challenge. However, the possibilities presented by Open Banking offer an opportunity for innovative product development which could appeal to business owners who have been reluctant to take out a business account so far.
This Report examines the UK market for small business current accounts and additional services such as small business lending. This includes discussion of the size of the market and a forecast for the next five years, the size and performance of small businesses in general and the activities of major providers. Mintel’s exclusive consumer research explores small business owners’ use of business accounts, their banking channel preferences, the features they look for in financial services providers and their awareness of Open Banking. Finally, the Report looks at small business owners’ attitudes towards business banking, including their interest in integrated services.
Products covered in this Report
There is no single definition of a small firm, mainly because of the wide diversity of businesses. However, the BEIS uses 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.
UK Finance 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.
