2023 will represent a record year for 7-day current account switching since the service launched back in September 2013. But not for SMEs.

An annual average of only 33,000 SMEs have used the Current Account Switch Service in the past decade. That works out at the equivalent of just 0.5% of UK SMEs.

The SME account switching statistics are highlighted in numbers from CASS highlighted by Allica Bank. And the challenger lender is using the CASS statistics as it ramps up efforts to gain market share.

Moreover, Allica notes that SME current account switching is at its lowest level for a decade.

In 2022 there were only 26,235 SME bank account switches. That number represents just 2.7% of the total 986,956 current account switches in 2022. In other words, the remaining 97.3% represented personal current account switches.

In the first nine months of 2023, the latest period for which numbers are available, total switches are up sharply.

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Specifically, personal and SME switches for January to September 2023 total 1,023,464. That is a 67% rise year-on-year from 610,849 switches for the same period in 2022.

1.2 million total switches in 2012 – an annual figure not exceeded until 2023

Back in 2012 there were 1.2 million switches and that figure has not been exceeded since the launch of 7-day switching. Since then, annual switches peaked in 2014 at 1.16 million. The annual total dipped then in each of the next four years, to 1,033,939 in 2015 and to 1,010,423 in 2016. By 2017 (931,956) the figure was back below the one million total and fell again to 929,070 in 2018. By 2021, the annual number had fallen even further to 782,223.

Q1-Q3 2023: SME current account switching falls to just 1.7% of all switches

The rise in total switching in the January to September 2023 period is notable. But only 17,879 of the over one million switches in Q1-Q3 2023 represented SME switches. That equates to a mere 1.7% of all switching.

Allica notes that SME switching ticked upwards for a short period between February 2019 and June 2021. This was due to the temporary RBS-funded Incentivised Switching Scheme administered by Banking Competition Remedies.

This scheme offered businesses thousands of pounds to switch banks. It created a modest boom in SME switching, motivating nearly 70,000 SMEs to leave RBS for a new provider.

As soon as the incentives ended, the number of SMEs switching their current account dramatically dropped.

Big 5 UK banks offer SMEs no switching incentives

According to Allica Bank, the vast majority of SMEs can see little or no benefit to switching their bank without an incentive. Moreover, it says that the ‘big five banks’ do not offer any SME-specific services which would make switching worthwhile.

Allica Bank became a member of CASS in December 2023. It launched its Business Rewards Account to give established businesses compelling reasons to switch their bank account.

Richard Davies, CEO of Allica Bank, said: “I wasn’t surprised to see the stats which show that minimal numbers of SME banking customers have switched their current accounts in the last decade. After all, what motivation has there been for them to do so? This is exactly why Allica Bank exists, to offer an alternative to the big banks.

“SMEs only switch when there’s a strong benefit in doing so. Our Business Rewards Account offers no account fees, cashback on all purchases, and a leading savings rate, so businesses can switch and save permanently. Our mission is to transform banking for established SMEs. We’re determined to drive change in the market. Britain’s SMEs deserve better.”