Throughout the 1990s, small businesses complained that the dominance of the big four high street banks led to poor service.
The cries of discontent became increasingly loud and in 2001 the Government commissioned Don Cruikshank, the former chairman of the London Stock Exchange, to investigate anti-competitive practices in the industry. Mr Cruikshank's report was so critical of the near-cartel structure of the banking market that the Government asked the Competition Commission to investigate.
The Commission made a number of recommendations including setting time limits for transferring accounts and free banking services for accounts in credit.
"Since the Commission's investigation, the market for small businesses has improved although the big four still dominate," David Bishop, a spokesman for the Federation of Small Businesses, says. "In part this is because banks such as HBOS and Abbey have starting to offer services to SMEs which has stimulated a bit of competition.
"Nowadays if a small business is not happy with its bank it can shop around to get a better deal."
Indeed, switch websites for consumers, offering a comparison service for charges by telephone, gas and electricity suppliers, as well as credit card providers, are now commonplace. But how do you go about checking the various available services if you are thinking of changing your company's bank?
"When deciding on which bank and which account is right, it is imperative to conduct an analysis of the specific services that are required," Richard White, the corporate finance manager at Mazars says.
"For instance, is there a facility to provide balance and statement enquiries to keep track of the company's finance? In terms of borrowing, is factoring and invoice discounting to raise finance against sales invoices available? Is there the facility to take out a commercial mortgage to raise finance against business property?
"It is also important to establish whether the prospective bank provides merchant services such as credit and debit card payments for customers. This is crucial as it is important to make it as easy as possible for customers to pay."
Once you have a list of two or three banks that offer the appropriate products, level of service and methods of banking that suit the needs of your business, it is important to check the finer details to ensure that you get the best deal in terms of bank charges, interest payments and credit interest.
And this is where an online business bank switch service comes in, using the British Bankers Association – Business Account Finder.
This allows you to build account comparison tables that suit the particular circumstances of your business, and provides the option to view a full breakdown of any accounts listed including the latest charges, interest and borrowing rates, and other services.
In addition it provides a breakdown of all business accounts that provide introductory offers and the facility to compare the full details of two accounts side by side.
Mr Bishop says that research is the key to securing the best deal. "Armed with a knowledge of the market, a business should not only be able to find a better deal with another bank but it should also be able to negotiate improved terms with its current bank."
Details of the Business Banking Code can be found on the Banking Standards Board website.
