<
p>B&C has been told that banks will find it difficult to attract back customers who they may have previously refused to help.
The news comes as two banks, Royal Bank of Scotland (RBS) and Standard Chartered, failed to meet all the requirements set in the Bank of England’s stress test.
The results left Ewen Stevenson, Chief Financial Officer at RBS, saying the lender had much to do to restore confidence.
When asked whether their failure to pass the stress test would lead to an increase in demand for alternative financiers, Bob Sturges, Head of Communications at Omni Capital, said it was fanciful.
He did, however, suggest that there were other more immediate threats to the high street banks.
"The threat facing the banks is in their former clients establishing successful long-term relationships with the new generation of lenders,” said Bob.
“As the latter's product portfolios continue to widen and their service skills improve, the banks will find it difficult to woo back customers they might reasonably be accused of having turned their backs on."
Bob said continued restraint by the big banks in certain areas of lending rather than a lack of capital or ready cash could lead to a surge in alternative finance.
“Where the banks feel comfortable in lending they are doing so with gusto,” said Bob.
“Buy-to-let is a clear case in point, and one that needs to be addressed soon to prevent a potentially dangerous bubble inflating. Other areas - such as funding to SMEs - are far-less well served.
“So long as the banks continue to cherry-pick in this way, the services of alternative funders will be sought out.”
A recent study by Funding for Lending revealed that RBS Group and Lloyds Banking Group were the largest source of finance for SMEs in the third quarter, but behind them were a number of alternative lenders and challenger banks.
Louise Beaumont, Head of Public Affairs at GLI Finance, said the result of the recent stress tests suggests that the lending appetite of big banks will remain small for the foreseeable future.
“The funding solutions available to SMEs have never been more diverse, however there is still a lack of awareness among them about all the options on offer,” said Louise.
“The long term decline in lending to SMEs is stunting the economy’s growth and it is vital that something is done so that they have access to the finance they need to thrive.”
A recent study by GLI found that SMEs’ lack of awareness about alternative finance is costing the UK economy up to £20bn.
Louise concluded: “What we need is bold and imaginative solutions that encourage SMEs to consider all of the finance options available to them and change their behaviours when it comes to consideration of alternative sources of finance.”
B&C has been told that banks will find it difficult to attract back customers who they may have previously refused to help..
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