British independent consumer group and rating provider Fairer Finance has added new business bank account product rankings designed to help small businesses.
The group now offers ratings for more than 30 product types, including insurance, banking and credit products, Fairer Finance said in a Monday (Jan. 20) press release emailed to PYMNTS.
The new business banking product rankings are designed to ease a process that can be time consuming and confusing, especially for new entrepreneurs, Fairer Finance Managing Director James Daley said in the release.
“Our new product ratings are designed to provide a shortcut for entrepreneurs — helping them get a handle on which accounts will prove the best value,” Daley said. “Firms will still need to do some extra work to understand which accounts meet all of their needs. But hopefully these ratings will make that process quicker and easier.”
The ratings consider each account’s benefits and costs, including fees that might not apply initially but are incurred over the account’s lifetime, according to the release.
For an account to achieve a five-star rating, it must offer key features needed by most customers, be competitively priced compared with its peers, and have reasonable fees and charges, the release said. No more than 15% of products receive Fairer Finance’s top, five-star rating.
To model the typical account usage of different types of businesses, the group’s business bank account ratings are segmented by high-frequency cash accounts, low-frequency cash accounts and cashless payment accounts, per the release.
“Our goal is to encourage better competition and transparency in this market, driving banks to innovate and to support small businesses to reach their potential and help drive economic growth,” Daley said in the release.
In February 2024, the U.K. Parliament’s Treasury Committee said more than 140,000 business accounts in the country — or 2.7% of all accounts held by small businesses — were closed by major banks in the previous year.
The eight banks that provided data for the committee’s report attributed the closure of these accounts to the banks’ risk appetite, financial crime concerns, lack of information sharing and other reasons.
Another new project aimed at helping British small businesses was announced Jan. 7 by the Centre for Finance, Innovation and Technology (CFIT).
The group said Mastercard and Lloyds Bank agreed to partner with it and fund its new industry-led coalition that will develop solutions to help the United Kingdom’s 5.6 million small businesses raise external finance.
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