Big banks fall short: why over 70% of small businesses claim neglect and discrimination

The power struggle between big banks and small businesses is widening, leaving 70% of SMEs feeling neglected and discriminated against.

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Nearly three-quarters of small and medium enterprises (SMEs) say their bank actively discriminates against them in favour of larger companies, according to new research.

The findings were contained in a survey of 500 UK SME owners, conducted by independent polling agency Censuswide, for HedgeFlows, a leading fintech platform. 

72% of SME owners say their bank provides very limited support – particularly around international payments – and further support is necessary to bridge the gap and provide the confidence to expand. 

A substantial majority of small businesses also feel ignored by their bank with 73% saying they even struggle to secure a meeting with their bank or financial manager, leading to stalling scaling and other growth issues. 

International trade

SME bosses also said plans for international and overseas trade were scuppered by high trading costs with 72% complaining bank transfer fees abroad were too high, especially when paired with credit card processing fees, and arguing for reductions for smaller companies.  

The cost of conducting international transactions can eat into profit margins, impact cash flow, and restrict the financial capacity of SMEs to pursue expansion opportunities. 

As a result, SMEs are being deterred from engaging in international trade, limiting their growth potential and confining them to a smaller, more crowded domestic marketplace.

The need for alternative funding structures

The simmering discontent and lack of opportunity – as evidenced by the report – has eroded SMEs’ trust and confidence in the banking system, to the extent that many are seeking alternative funding sources and arrangements. 

In the long run, this has the potential to create a fragmented financial landscape where SMEs struggle to find suitable banking partners who understand their unique needs and provide tailored solutions.

However, greater competition in the financial sector is emerging with the rise of challenger banks (such as Startups’ 100 Alumni Starling Bank or Revolut). These can be instrumental in encouraging banks to provide SMEs with more competitive and customised fee structures. 


With the emergence of upcoming fintech solutions and alternative financial providers, SMEs will gain access to a broader array of affordable options for international transactions and beyond. Those that are already available for their bigger and more robust counterparts during these turbulent economic times.

As Neh Thaker, co-founder of HedgeFlows, points out:

“SMEs are the beating heart of the UK economy, creating jobs and driving crucial growth in uncertain times. It’s absurd that so many of our most ambitious and fast-growing businesses feel left out in the cold by their banks.”

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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