While it may already seem like an age ago, I’d like to take this opportunity to wish you a happy New Year. We are looking forward to the opportunities that 2018 brings and believe that customer choice in banking will become increasingly important as the year progresses, a move we welcome.
Nine of the bigger banks are due to adopt new Open Banking rules by 13 January. Open Banking is designed to increase choice by "enabling personal customers and small businesses to share their data securely with other banks and with third parties, allowing them to compare products on the basis of their own requirements and to manage their accounts using regulated third parties to provide new and innovative payment services."
In addition, after a year of discussion and debate, international regulators have finally announced the finalised Basel III banking reforms, which intend to boost banking competition by levelling the playing field in terms of the capital requirements banks must hold, which will hopefully make it easier for smaller banks to compete in certain areas of lending when they come into effect from 2022.
These reforms will help increase innovation and competition in the banking sector. While the results of these changes will emerge over time, we are already factoring the implications of these changes into our plans for products and services at Hampshire Trust Bank.
We believe it is vital for people to have easy access to a wider range of financial services, tailored more closely to their circumstances and requirements. At Hampshire Trust Bank we pride ourselves on employing experts in the SME sectors in which we operate.
The Competition and Markets Authority identified that "there is a particular problem in SME banking where many SMEs open their business current accounts at the same bank where they have their personal current accounts, then stick with that bank for their business loans". This needs to change.
We believe that increasing customer choice in banking is key in helping UK SMEs to grow, in turn helping to drive the economy forward, which is good news all around. Let's hope 2018 provides a step in the right direction.