According to MoneyTransfers.com, the two banks have done 51% of bank lending to small businesses in the U.K.
Commenting on the report, Jonathan Merry, CEO of MoneyTransfers.com, said. “Challenger and specialist banks are at the forefront to ensure the small SMEs succeed. They have offered more competitive products, improved customer service, and made the application process quicker and easier.”
He continued: “The data shows that these banks are not only lending to small businesses but also approving more applications. This is a positive sign for the U.K. economy as small businesses are the country’s backbone.”
Driving Economic Growth
The growth of challenger and specialist banks has been driven by several factors, including the 2008 financial crisis. The crisis led to a loss of confidence in the big banks, which created an opportunity for challenger and specialist banks to fill the void.
Another factor that has contributed to the growth of these banks is the increasing regulation of the banking sector. The introduction of the Banking Reform Act in 2013 placed strict regulations on the big banks, making it difficult for them to compete.
Digital Banking Will Open More Opportunities for Small Businesses
COVID-19 endeared people to online banking. It was the only available choice during the lockdown. The figures show that digital banking is expanding well and might sustain growth.
Online banking offers the most streamlined customer experience. Besides, digital banking has options for mobile loans that are useful to small businesses. Challenger and specialist banks are adopting the digital banking mode in the U.K.
The adoption ensures that small businesses enjoy the reliability of accessing funds from the comfort of their shops.
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