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Monday, 27 November, 2000, 18:05 GMT
Banks 'in the red' over service
Bank of Scotland HQ
The Bank of Scotland has its HQ in Edinburgh
Two Scottish banks have come bottom for quality of service in a survey of small businesses.

The Cydesdale Bank and the Bank of Scotland were rated to have the worst performance in a UK-wide survey which said quality was at its lowest level for four years.

The study by the Forum of Private Businesses (FPB) said a dependency on call centres and a lack of staff able to make decisions quickly had affected service.

The survey, based on 7,725 responses, found that the overall performance of British banks had slumped to 1996 levels.

The great concern is that if small firms see a reduction in bank quality in good economic times, what will happen when, or if, the UK experiences another credit crunch?

FPB chairman Stan Mendham
The Bank of Scotland, with a performance index of 52.9, and the Clydesdale Bank (47.8) came in at the foot of the table.

But a spokesman for Bank of Scotland said the survey was in contrast to its own discussions with customers who said they were satisfied.

The best performance was by the Allied Irish Bank which was given 58.6 points.

The research also found that more customers had considered changing banks than in the last FPB survey two years ago.

Lloyds TSB and NatWest led that table with more than 30% of its small business account holders contemplating a switch.

FPB executive chairman Stan Mendham said the figures showed that UK banks were at a crossroads in their relationship with small firms.

Clydesdale Bank logo
The Clydesdale also got a low rating
He said: "The benefit of faster and better information through IT improvements appears to have been wiped out for many small businesses by bank restructuring and staff reductions.

"The banks appear to lack people on the ground able to make the right decisions quickly enough and to action them."

Mr Mendham said market segmentation, where small businesses get a level of service according to their size, had been a prime reason for a rise in the number of complaints.

He added: "The great concern is that if small firms see a reduction in bank quality in good economic times, what will happen when, or if, the UK experiences another credit crunch?"

A fear of an overdraft being removed was, along with the cost of banking, the most worrying factor for small businesses.

The number of firms using telephone and internet banking almost doubled since 1998 to 29% and 27% respectively.

'Market leader'

The Clydesdale and the Bank of Scotland both denied rumours last week that they were in talks about a merger.

Tom Abraham, of the Bank of Scotland, said: "We are the market leader in providing banking services to the small and medium enterprise sector in Scotland and we continue to grow our business because our products and services meet customer demand and expectation.

"A survey of 600 of our own business banking customers in June this year revealed that 81% were satisfied or very satisfied with our service and 78% would recommend Bank of Scotland to their friends and associates.

"What's more, complaints from our business banking customers have dropped by just over one-third in the last three months, compared to the previous three months."

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See also:

23 Nov 00 | Scotland
BoS, Clydesdale in 'link-up talks'
05 Nov 00 | Scotland
Abbey seeks talks with BoS
03 Nov 00 | Business
BoS rejects Abbey National approach
03 Nov 00 | Business
Bank merger wave
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