So now we know the runners and riders for the long delayed £350m RBS incentivised switching scheme.
Banking Competition Remedies, the body established to manage a giveaway funded by RBS, has shortlisted 11 UK lenders.
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The list contains few surprises. Specifically, Clydesdale, Metro Bank and Handelsbanken will be fancied to benefit from the package. Notably, Monzo and Nationwide feature despite not currently offering business banking accounts.
Santander, Cooperative and TSB are shortlisted along with digital challenger Starling. In addition, two private banks, Arbuthnot Latham and Hampden make the shortlist.
The incentivised switching scheme forms part of the RBS Alternative Remedies Package (ARP) worth £775m in total.
And RBS is having to take the £775m hit as part of conditions attached to its 2008 £45.5bn government bailout.
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By GlobalDataIt all dates back to RBS’ embarrassing failure to spin off its Williams & Glyn business unit.
Originally, the Williams & Glyn business unit was made up of 321 Royal Bank-branded branches located in England and Wales and six NatWest-branded branches in Scotland.
The W&G unit comprised about 1.4 million retail customers and more than 200,000 SME customers.
RBS total spend on its failed W&G unit, including two abortive sales, totalled over £1.5bn.
The ARP aims to promote competition in the market for banking services to UK SMEs in two ways:
- The RBS incentivised switching scheme is worth £350m. The banks ultimately selected by BCR will share a cut of the fund to incentivise RBS SME customers to switch;
- Additionally, a £425m Capability and Innovation Fund grants funding to a range of competitors in the UK banking and financial technology sectors.
Incentivised switching scheme: progress painfully slow
The incentivised switching scheme was originally designed to launch in the first half of 2018.
Godfrey Cromwell, BCR’s chairman, says: “It’s very good news that a broad selection of organisations have stepped forward and made a diversity of offers right across the SME client-base.
“Today’s announcement marks an important milestone for Incentivised Switching.”
BCR will now engage with the organisations with reviewed offers in order to progress contracting and verification of operational readiness.
On completing these processes, a dedicated website will place the organisations’ offers in front of former Williams and Glyn’s SME customers at the end of February 2019.
