Simon Walker, the former director general of the Institute of Directors, has been appointed as independent chair of a UK Finance review into the complaints and alternative dispute resolution (ADR) landscape for the UK’s SME market.
Commissioned by UK Finance, a trade body containing the former Asset-Based Finance Association (ABFA), the independent review will look at the scale and complexity of banking complaints from SMEs.
It will focus particularly on disputes between financial services providers (excluding insurance products) and small business customers that remain unresolved through the normal customer complaint procedure and may be unsuitable for court processes.
All banks have complaint arrangements which attempt to put things right quickly, apologise and, if appropriate, offer some compensation for costs incurred and payment in recognition of distress and inconvenience.
However, in some cases, complaints go unresolved to the satisfaction of the customer or cannot be dealt with by this internal procedure. A key objective of the ADR review, which was also referenced in the Financial Conduct Authority’s (FCA) consultation on SMEs as users of financial services, will be to identify solutions that would be capable of producing fair outcomes for both SMEs and providers.
In recent months, the Promontory review into SME complaints at RBS revealed unsatisfactory lending outcomes for small businesses, with mainstream press attention spurring a review into SME complaints from the Treasury Committee and Business, Energy & Industrial Strategy (BEIS) Committee.
The UK Finance review will be led by Walker, who has been appointed by a selection panel comprised of representatives from the Fair Business Banking and Finance APPG and the Federation of Small Businesses as well as the independent chairs of the UK Finance SME Advisory Group and the IFABL Standards Council.
As Chair, Walker will have independent leadership over the review process that will include in-depth analysis of SME customer disputes and outcomes involving research with SME users of financial services. The review will also examine different dispute resolution processes, including those operating in different sectors and countries. The review is intended to produce evidence-based conclusions to support recommendations for the industry and government as appropriate. The Chair will publish his findings in a report with full editorial control.
The review process will include academic research with SMEs and data analysis. UK Finance will provide funding and basic administrative support.
Simon Walker, chair of UK Finance independent ADR review, said: “SMEs are an important driver of growth and how the sector interacts with financial providers is crucial in helping support the UK economy. This review is an important step in understanding the best route to SME complaints redress with all options up for consideration. I am determined that this will be a thorough review with no stone left unturned, using a combination of academic research, stakeholder evidence and international comparisons to identify best practice.”
Teresa Graham CBE OBE, Chair of UK Finance SME Advisory Group said: “It’s essential that any review of SME market complaints is rigorous, impartial and objective, with the selection of the chair critical in achieving this. Simon’s credentials more than speak for themselves and he was a unanimous choice for the selection panel.”
Martin McTague, Policy Director for the Federation of Small Businesses said: “When small businesses have faced disputes with their bank, it has often felt like a ‘David and Goliath’ situation. The issues around complaint-handling and redress must be tackled, and we are delighted to see fairness will be at the heart of this review. We welcome Simon’s appointment and look forward to working with him to help find new solutions.”
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