Britain’s biggest banks lose share as providers of foreign currencies to businesses – survey
An industry report by East and Partners shows that the top non-bank provider of foreign currency to British firms last year was Western Union, followed by Monex, CMC Markets, IG Markets, Saxo Bank and American Express.
A survey, conducted amid more than 2,000 British firms, has shed a light on which financial businesses they used as their primary providers of foreign currency in 2016. The study, carried out by business banking market research and analysis firm East and Partners and initially reported by Reuters, shows that big UK banks lost share in terms of supplying Britain’s firms with foreign currency last year.
Although Barclays, HSBC and Lloyds maintained their status quo as the top trio of currency providers to companies, all of them saw their market share decline. For Barclays, that share dropped to 14.3%, for HSBC – to 13.5%, and for Lloyds – to 10.6%.
By contrast, only a handful of big banks managed to register an increase in their share, those being ING, Bank of America Merrill Lynch and Bank of China, according to the survey.
Western Union, which was the biggest non-bank currency provider to UK businesses last year, as per the study, saw its share rise from 3% in 2015 to 3.4% in 2016. Western Union is followed by Monex, CMC Markets, IG Markets, Saxo Bank and American Express. Impressively, boutique providers registered a twofold jump in their share.
One of the major reasons for the results mentioned above is the fact that British firms are shopping around for the best offer, with non-bank currency providers often offering smaller spreads than banks, as well as top-notch technology solutions.
Another factor to consider is simple: customer service. You may recall FinanceFeeds’ article from the last summer showing the difficulties experienced when one tries to open a business account with a major, multi-billion pound British bank. With HSBC, that involved waiting of up to three weeks to make a physical appointment with a business manager. The pattern of poor service was similar with Lloyds and Barclays.
HSBC and Barclays are not warmly welcoming FX businesses that want to open account with them. FinanceFeeds’ research published late last year noted that these two banks, which are two of the world’s biggest FX interbank dealers, shun doing business with anyone who mentions the Forex industry when opening a bank account.