News in brief: challenger banks, asset financing, freelancers, skills gap

News in brief
News in brief

Challenger banks come top for customer satisfaction

As reported earlier in the week, the big four banking groups – Lloyds Banking Group, Royal Bank of Scotland, Barclays and HSBC – have 85% of the SME market share, yet customer satisfaction remains low. Only 26% of SMEs said they would recommend their bank to others – however, this is up from 23% in 2014.

The top-ranked leaders were the challenger banks. A lot of this has been attributed to their having a better working relationships with their clients. As Haslers corporate finance partner Michael Watts put it: “Some of the challenger banks have been very good at recruiting the experienced traditional bank managers from the big four. Their experience and smaller portfolios can lead to better customer service. Some of the teams in the big four banks have a large number of customers, sometimes as high as 300, which they cannot have a proper relationship with.”

However, while a lot of it is down to good practices, there is also the risk that the SMEs are still in the “honeymoon period” with their new bank, according to Whittingham Riddell tax partner Duncan Montgomery.

Montgomery explained: “Businesses tend to have lower satisfaction when times are tough, which they have been, or when they have been in trouble financially. Challenger banks have generally not had large customer portfolios during that period and will therefore score more.”

Asset financing industry on the rise

Asset finance new business (primarily leasing and hire purchase) grew by 10% in November 2015, compared with the same month in the previous year, according to figures released by the Finance & Leasing Association (FLA).

New finance provided for commercial vehicles and IT equipment grew by 20% and 15% respectively in November, while plant and machinery finance was up 8% over the same period.

FLA head of research and chief economist Geraldine Kilkelly said: “In November, the asset finance industry reported its strongest rate of new business growth since June. In 2015 as a whole, we expect the market to record its second consecutive year of double-digit new business growth and reach its highest level of annual new business since 2008.”

Freelancers will help bridge skills gap

Platforms such as LinkedIn and the option of working effectively from any location means the ability to tap into a larger talent pool to find the right skillsets for a businessand in 2016 SMEs will likely harness this to bridge the digital skills gap.

Research from software provider Citrix and YouGov found that employing new staff with basic digital skills was the third most important factor for growing a business after access to fast internet connections and expenditure on technology. Additionally, businesses are moving away from a structured workforce to a more project-based world.

These two factors have contributed to a booming freelance economy, as SMBs search for remote workers and freelancers. For businesses, freelancers offer a range of advantages, including being generally more mobile and flexible.

Survey to examine perceptions and satisfaction levels of apprenticeships

The Industry Apprentice Council (IAC) has launched its third annual survey of apprentices in a bid to help tailor advice and training for future generations.

The survey, which was launched on January 14, will run until February 19 and covers a range of areas including the wide=ranging and changing perceptions of apprenticeships, satisfaction with apprentices’ own career choices and the advice and guidance they were given before becoming an apprentice.

Results of the survey will be published in the spring and will be used to inform employers, educators, training providers and the government as to their policies on apprentices.

Apprentices are a key priority for the government, and the apprenticeships levy has recently been increased to £3bn in a bid to tackle the skills gap in the UK.