BoS to make switch for small businesses

Bank of Scotland, now part of HBOS since its merger with Halifax, will increase the pressure on high street rivals in the business banking market by doing all of the work for customers who want to switch to it from other institutions.

From January, BoS will handle the necessary paperwork to enable small business customers to make the move. At the moment businesses have to handle the frequently complex process themselves, which includes writing to direct debit companies and changing staff payments.

The size of the task, which often takes nine weeks to complete, is widely thought to discourage many small businesses from switching banks.

The lack of switching was one of the main concerns of the Competition Commission in its recent investigation into the "complex monopoly" by big banks in the business banking market.

The Commission's report has been passed to the Department of Trade and Industry. The DTI is expected to want to see all banks undertake to improve switching for business customers – probably in next year's new business banking code – if they want to avoid having a maximum time for carrying out the service imposed on them.

Banks have been chivvied about switching on the personal banking side as well, following Don Cruickshank's critical report into the area last March.

From today, banks are launching an improved service for personal customers. The move will be along the same lines as BoS's plans on the business side, with each bank undertaking to handle the process of switching on customers' behalf.