Banks look to ease SME Brexit concerns

Barclays and Danske look to help navigate difficult Brexit terrain

The commercial and business banking arms at two of the UK’s largest market participants are moving to allay concerns and work with clients as Brexit uncertainty causes ripples across both the small and medium enterprise (SME) sector.

“I don’t see any immediate concerns around withdrawal,” said managing director of business banking products and propositions at Barclays, Andy Booth, speaking at RFi Group’s Global Business Banking Summit in London this week. “While the outlook might be uncertain and unclear, actually the range of solutions that SMEs are going to have access to is much broader.

“They’re actually in a good spot. It’s an exciting time for SMEs, the opportunities to grow and do things differently are increasing,” said Booth.

Danske Bank – Northern Ireland’s largest lender – is working closely with business clients to alleviate Brexit uncertainty, said Søren Rode Andreasen, the bank’s chief digital officer, at the same conference.

“For our clients it’s probably worse because they need to make some hard decisions. Some clarity for them would be good. We live for our clients, so that’s the way it impacts us.”

A report by the British Business Bank released last month found that 34% of SMEs believe Brexit will make funding more difficult. Booth believes this is not the case.

“SMEs are not concerned about access to funding at all, but actually they are continuing to borrow,” he said, citing RFI Group data.

“What’s great about the new world of innovation with fintech, such as our work with marketinvoice, is there are more solutions out there than there ever have been for you to find funding solutions,” said Booth.

Barclays has recently launched a Brexit business clinic to engage with customers who may be concerned.

“The phrase ‘clinic’ is purely diagnostic. It’s basically saying ‘here are three or four problems that we know could happen’,” said Booth. “It could be looking at scenarios where SMEs that employ EU citizens may need to look at local labour markets should those employees return to their home nations. It may look at SMEs who’ve dabbled a bit in Europe and have gone into a world of taxes, borders, customs and import duties.”

While Andreasen believes Brexit will be postponed and a hard brexit the most unlikely outcome, he recognises the problems a hard border poses for SMEs.

“If there were a hard border with the Republic, then the biggest issue will be the flow of goods because of potential customs, rather than the money flow.

“We have quite a unique setup [at Danske] because we’re two separate banks with a UK and European banking licence but run on the same IT system. Usually when banks acquire foreign banks, they make use of their existing IT systems.

“We took that investment upfront and brought each acquired bank onto the same platform. That means if we have a customer in Northern Ireland, we can set them up with an account in Poland and they get the same interface – see both their accounts in real-time.

“We can also do multi currency cash pooling where we give business customers one credit line that covers all of their countries, all of which we can do and pretty much no other bank can, because we have the same underlying platform.

“Brexit could affect us in potentially a really good way,” says Andreasen.

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