The RBS Business Banking Switch - Everything You Wanted to Know But Were Afraid To Ask
RBS is asking businesses to move their accounts to other banks, and small businesses up and down the country may well have been surprised to find that their bank does not want their money any more.
Many business customers with RBS have received notice that the bank wants them to transfer their accounts to other providers. Turning away clients with business worth £billions seems a strange thing for a bank to do – but it comes as a consequence of the Government’s bailout of RBS in the financial crisis of 2008.
We provide answers to some of the key questions customers - and others - are asking here about the RBS Business Banking Switch.
And remember, at Rangewell we have a team of experienced former RBS Business Bankers and Relationship Managers who know the business banking market inside out. They can assist you in identifying an appropriate bank, new or old, suited to your needs.
You don’t want to make the wrong switch so call us on 0330 808 8802 or email firstname.lastname@example.org to talk to us about your specific questions and issues.
What has happened to RBS?
During the financial crisis in 2008 and 2009, RBS received substantial financial support from the UK Government. In return, the bank was instructed to help increase competition in UK business banking by decreasing their own substantial market share.
RBS remains a pillar of the banking community, and personal customers will not be affected. However, if you are a business owner with an RBS business account, you may need to move your account to another bank.
To help ensure this process is as painless as possible, RBS will be funding an incentivised switching scheme commonly called The RBS Business Banking Switch. This scheme is designed to provide you with offers that are better than those normally available for businesses moving their accounts, and may range from free banking to cash incentives.
February 25th has been set as the launch date of Business Banking Switch by Banking Competition Remedies Limited (the BCR). The BCR is an independent body that has been created to oversee the scheme and make sure it’s run fairly.
RBS will get in touch directly with all businesses who are eligible to take part, but if you've got questions and want to talk to someone who is independent you can call us on 0330 808 8802 or email email@example.com to talk to us .
Remember at Rangewell we have a team of experienced former RBS Business Bankers and Relationship Managers who know the business banking market inside out.
Why is this happening?
RBS made a bit of a mess of things in the lead up to the financial crisis and had to be bailed out by the taxpayer to the tune of £45bn to keep it afloat. As part of the compensation measures, it was originally agreed with the European Commission that RBS would transfer customers of The Royal Bank of Scotland in England and Wales and NatWest in Scotland into a relaunched Williams and Glyn Bank and then divest of that business.
Selling proved harder than anticipated so an alternative scheme was established to boost competition in business banking in the UK by giving financial assistance to a number of Challenger banks, funded by RBS. This is known as the Alternative Remedies Package or, more commonly, the RBS Business Banking Switch.
What’s in it for you?
Apart from some grief that you could probably do without, there are some incentives and compensation available.
- RBS is making £275m available to the new Challenger banks to allow them to offer incentives for you to transfer your business bank account, and
- RBS is making £75m available to cover customers’ costs of switching.
What banks will we be able to transfer to?
You will be able to transfer to any bank, but the Government is keen to increase competition in the business banking market and the £275m that it is effectively fining RBS is being directed towards 15 Challenger banks to allow them to develop their services for SMEs and offer switching incentives.
HERE ARE THE BANKS INVOLVED:
1. Arbuthnot Latham - more information can be found here
2. Clydesdale Bank - more information can be found here
3. The Co-operative Bank - more information can be found here
4. Metro Bank - more information can be found here
5. Monzo Bank - more information can be found here
6. Nationwide Building Society - more information can be found here
7. Santander Bank - more information can be found here
8. Starling Bank - more information can be found here
9. Handelsbanken - more information can be found here
10. TSB Bank - more information can be found here
When is this happening?
Switching will start on 25 February 2019
Do we have to transfer?
RBS is currently encouraging eligible businesses to register their interest in transferring, but it has committed to migrating at least 120,000 of the 202,000 that meet the criteria, so it seems pretty clear that options will become less and less if the target isn’t achieved quickly.