The Chief Executive of Aldermore Bank has urged the Competition and Markets Authority (CMA) to launch an inquiry into SME lending.
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div>The Chief Executive of Aldermore Bank has urged the Competition and Markets Authority (CMA) to launch an inquiry into SME lending.
The CMA is currently deciding whether to launch an in-depth investigation into the banking needs of SMEs. The Challenger Bank’s CEO Phillip Monks backs the need for a full inquiry.
In a statement about the findings by the CMA, Phillip said: “We welcome the CMA’s conclusions and strongly encourage the opening of a wider inquiry into competition in the SME lending market. It is imperative that we identify why the market is not working in the best interests of customers at present and this inquiry will be key to ascertaining the challenges and potential solutions to this issue.
“It is highly concerning that the barriers to entry and expansion for newer and smaller banks remain significant and that the dominance of the big four continues, despite there being little difference in terms of the services they offer. Aldermore’s net lending has increased rapidly year-on-year at a time when business lending has been severely constrained, and more needs to be done to enable new entrant banks to deliver for SMEs where traditional banks are letting them down.
He added that further changes remain necessary to reduce the grip that traditional lenders have on the market and in enhancing transparency and simplicity in banking for consumers.
CMA’s initial study, in conjunction with the Financial Conduct Authority, examined the essential parts of the UK retail banking sector and whether they have a lack of effective competition and do not meet the needs of personal consumers or small and medium sized enterprises.
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