Banks not fulfilling retail SMEs foreign currency needs

Small and medium-sized enterprises in the retail industry who are looking to expand internationally are being hindered by “poor service, unclear fees and a lack of appropriate products” when using banks for international currency transfers, according to new research from currency experts, World First.

The research surveyed more than 1,000 senior decision makers at UK SMEs currently trading internationally and found of those in the retail sector and using a bank for their currency transfers, 44 percent felt their bank did not understand their foreign-exchange needs.

Additionally, 59 percent using a bank admitted to not understanding the charges applied to their international currency transfers, whilst over half (52 percent) stated that their bank fails to offer them a full range of appropriate products to help them manage their foreign currency needs, and two-fifths (41 percent) said they did not think their bank acted in their best interests when managing their foreign exchanges.

The research also highlighted the global ambitions of many retail focused SMEs with 84 percent stating that international expansion was one of the best ways to grow their business. So addressing the foreign-exchange needs is hugely importantly, especially as UK SMEs make a total of 78 billion pounds in international transfers annually.

Jonathan Quin, chief executive of World First, said: “SMEs, the engine room of our economy, are telling us that they are not being served well by the banks when it comes to fulfilling their foreign currency needs.

“If we want UK businesses to achieve their potential, particularly those in the scale-up phase and eyeing up international expansion, then we need to break down as many barriers for them as possible. More than half of businesses in our survey say that they have struggled to expand internationally and even if 1 percent of this is due to a lack of support from their FX provider, then this is simply too many.”

Quin, added: “UK SMEs collectively transfer around 78 billion pounds a year, and if all the UK’s SMEs saved just 1 percent on their annual FX bill, this would amount to a whopping 780 million pounds in total savings.”