Government acts to improve focus on customers of financial services
26 Jun 2014 10:25 AM
Measures in the
Small Business, Enterprise and Employment Bill will enable banks to use new
technology to deliver better services for
customers.
The Economic Secretary to the
Treasury, Andrea Leadsom, has welcomed the introduction of the
government’s Small
Business, Enterprise and Employment Bill, which includes two major
innovations to improve the focus on customers of financial
services.
Through the bill, the government
will change existing legislation to enable banks to use new technology to
deliver better services for customers. This includes modernising cheques
legislation so that banks and building societies can introduce “cheque
imaging”, which will speed up cheque clearing times and give customers
greater convenience and choice in how they deposit cheques.
Cheques are a crucial part of
the British payments landscape and are especially important to small businesses
– sole traders and other micro businesses continue to make over a fifth
of their outgoing payments in cheques.
While customers will continue to
be able to deposit cheques at branches, cash machines, Post Offices or by post,
banks will also be able to offer the option of paying in cheques via
smartphone, tablets or other technology.
Read the consultation
response, ‘Speeding up cheque payments: legislating for cheque
imaging’
The government has also
confirmed that it will help small businesses access the finance they need to
grow by opening up access to the credit data that the major banks hold on their
SME customers to other banks and finance providers.
The proposals are intended to
make it easier for SMEs to seek loans from a lender other than their bank by
improving the ability of challenger banks and alternative finance providers to
make accurate SME risk assessments and lending decisions.
Read the consultation
response, ‘Competition in banking: improving access to SME credit
data’
The Economic Secretary to the
Treasury, Andrea Leadsom, said:
Key to the government’s
long term economic plan is building stronger and safer banks that customers can
trust. We also want Britain’s consumers and businesses to have far
greater choice in banking services and that’s why the legislation being
published today is so important.
The innovations included in this
Bill, including cheque imaging, show the government is determined to keep up
the pace of our reforms to create a banking sector that delivers for
Britain’s hardworking people and businesses.
The measures in the Small
Business, Enterprise and Employment Bill build on the reforms the government
has already introduced to increase competition and innovation in the banking
sector, which are good for customers and the economy. These
include:
- 7 day current account switching
service to give consumers and businesses the power and confidence to vote with
their feet
- significantly reducing barriers
to new banks entering the market to shake up competition
- putting competition at the heart
of our regulatory system, including a new payments systems
regulator
The government has also
recently consulted on
whether to introduce legislation to require lenders to small businesses to
release details of the businesses that they reject for a loan. Making this
information available could help SMEs access finance by enabling and
encouraging alternative finance providers to come forward and discuss other
options with them. The government is currently considering the responses to
its consultation, and
will set out further details in the coming weeks.
The UK is a great place to set
up a business and more people than ever are beginning new enterprises. The
government is backing business every step of the way and introducing
legislation to help make the UK the most attractive place to start, finance and
grow a business. The Small Business, Enterprise and Employment Bill will help
to build a stronger and fairer economy by supporting small businesses as they
compete, and ensure they are not disadvantaged by those that do not play by the
rules. It will foster and back the entrepreneurial spirit and build on the
UK’s reputation as a fair and trusted place to do business. The Bill sets
out measures to help hard working people have confidence in their employers and
reduce the barriers that can hold businesses back from growth.