A £50 million ($63.3 million) service to fix problems between banks and their small business customers is set to close after three years.
When the Business Banking Resolution Service, backed and funded by a group of lenders, launched in February 2021, the industry thought 60,000 customers would be eligible to have their problems heard. The BBRS said in its annual report released on Thursday it “left no stone unturned in its mission to encourage eligible SMEs to register their complaint,” yet just £2 million of redress has been recorded and 137 cases solved.
“We will inform customers and the public as soon as the banks make a decision about the future funding of the scheme and its expected closure,” Chief Executive Officer Mark Grimshaw said in the report.
Banks spent £23 million to set up the BBRS and a further £26.5 million on running costs over the past three years. Barclays Plc, Danske Bank, HSBC Holdings Plc, Lloyds Banking Group Plc, NatWest Group Plc, Virgin Money UK Plc and Banco Santander SA were the backers. It’s run independently and takes cases from customers too big to use the Financial Ombudsman Service.
UK Finance, the industry trade body, said the participating banks “are in discussions with the BBRS on the future of the service” and a further announcement will be made in due course.
A debate in Parliament last year suggested the BBRS had a bleak future. William Wragg, a Conservative MP, described the project as an “abject failure” while Andrew Griffith, then economic secretary to the Treasury, said it was “effectively headed for the exit in all circumstances.”
Earlier this month, the Treasury Select Committee called for it to be replaced with a new independent system.