Nationwide, the world’s biggest building society, today announces that it will launch a business bank account with or without external funding as it commits to supporting small firms up and down the country.
The Society, which won the accolade of Which? Best Banking Brand of the Year for the last two years, also announces it is making a submission to the Incentivised Switching Scheme as a precursor to applying for up to £50 of funding from the Capability and Innovation Fund so that it can launch a market-leading, digitally enabled business current account by the end of 2019.
Funding will ensure Nationwide maximises its potential to enter the market with a strong and vibrant proposition that will use the Society’s leading service and trust credentials to attract new and existing members. But even without the funding, Nationwide has now committed to launching a business current account next year that could grow organically over time.
The account will be designed to meet the straightforward needs of small and microbusinesses combining fair value with Nationwide’s market-leading service levels. The proposition will combine innovative digital technology with access to branch service.
Joe Garner, Nationwide’s chief executive, said: “Supporting small businesses with a current account marks an important step for Nationwide – each year around 50,000 of our members ask us if we can help. This opportunity is just too big to ignore, which is why today we are reaffirming our commitment to launch a business bank account proposition.
“Successfully bidding for the Capability and Innovation Fund remains our number one priority – it will accelerate our ability to give our members a fully-fledged business banking service with the associated benefits such as unsecured term lending and credit cards. Without the funding we will still launch our proposition. This option would clearly take much longer to reach maximum potential as it would not initially benefit from the added products and services, incentives and marketing drive we are currently considering. We believe we can make a real difference as our proposition will build on the high levels of service and trust associated with Nationwide.”
As the only major financial services provider not to currently offer a SME banking proposition, Nationwide aims to make a real difference to a sector it believes is underserved, with five big banks holding 85% of business accounts. Nationwide is extremely well placed to enter the market, having grown its personal current accounts by over 40% in the last five years, with Current Account Switching Service data showing that the Society attracted one in every five switchers for the period of April to September.
The Society will use its leading service and trust levels to attract both new and existing business banking customers, who will benefit from being able to transact across the Society’s network of around 650 branches.
As a mutual organisation driven by member needs and not profit, it will focus on the UK’s 5.6m smaller and micro businesses - from tradespeople and sole traders to owner-managed businesses. And with more than 95 per cent of UK businesses having fewer than ten employees, this will ensure Nationwide has wide appeal.
A new team - Nationwide for Business - has been established to create and deliver the new account, in addition to applying for funding.
Joe Garner added: “Small businesses typically do not have complex banking needs, but they do demand and deserve excellent banking products and services as well as fair value. They need a current account that doesn’t take days to open or that levies large fees. They need someone they can contact and trust when they have a problem, and they need to know their banking provider has the scale and stability to be there when they need it.
“Nationwide is the only major financial services provider not to currently offer business banking and it is the only credible alternative that could change the way the market operates. We can do this by offering a fair product that doesn’t discriminate based on the size of a business or its ambitions to grow.”