In response to the Treasury Select Committee Report published on 8 May 2024 on SME Finance, which contained a section on dispute resolution for SME banking cases (including the BBRS), the BBRS is restating the following, important points. These points are necessary context to fully and correctly understand and comment on the work the BBRS has undertaken within its given remit.

The size of the market

It is important to remember the small size of the market the BBRS was set up to serve, with 99% of the SME market already covered by the Financial Ombudsman Service for Business. Within this small market, the BBRS has left no stone unturned to encourage eligible SMEs to come forward to seek help with their banking complaints.

The BBRS commissioned Bayes Business School, in September 2021, to conduct an independent review to determine the likely number of eligible businesses. Bayes academic research concluded the total pool of potentially eligible complaints, at the end of 2020, across both the historical and contemporary schemes, would be a maximum of 1,648.

Despite an extensive awareness campaign, the number of eligible customers registering with the BBRS has been lower than anticipated. Our case data, insights and research suggests that the demand for a dispute resolution service within the market the BBRS was set up to serve simply doesn’t exist.

Delivery success  

It is therefore wrong to describe the BBRS as a “failure” (SME Finance Report page 15, point 45, quotation from the Federation of Small Businesses). The BBRS has been entirely successful in delivering the service it was set up to deliver. It is not a mark of failure for the BBRS that there were less customers than the SME bodies and banks who set up the service anticipated.

Eligibility criteria

It is wrong to suggest that the BBRS is uninterested in making changes to widen its eligibility criteria (SME Finance Report, page 15, point 45). The BBRS resolves cases according to the principles by which it was set up and has no powers or jurisdiction to change those rules.  The Scheme Rules for the BBRS were unanimously agreed by bank, SME and business group parties prior to launch. We have set out the mechanism by which rules can be changed, which requires agreement between the banks and the SMEs. This document can be found on our website.

Trust levels and case volumes

We were surprised to see a statement by the Treasury Committee Chair suggesting a link between a supposed lack of trust and the number of cases registering with the BBRS: “…nobody trusted it and therefore barely any firms used it.” Telegraph, 8 May.

There is no data to suggest that businesses did not use the BBRS because it was not trusted, or that the wider business community is dis-satisfied with the role of the BBRS.

According to research gathered by Opinium for the BBRS, of the 240+ business owners surveyed, 91% saw the BBRS as being essential or useful. The BBRS works closely with business groups to promote our service and encourage eligible businesses to come forward.

In our written evidence to the committee, we address why the anticipated BBRS case volume may not have materialised. We suggest there was optimism bias from self-interested parties and a lack of scrutiny on the data at the set-up stage from all parties involved.

Customer Satisfaction for the BBRS service

Our evidence shows that we have high levels of customer satisfaction amongst users of the service. It is therefore inaccurate to describe there to be “…dissatisfaction with the service from the SME community…”. (SME Finance Report, page 16, point 48).

There are two issues here:

1. Our customer satisfaction is high

70% of customers surveyed believe they received a resolution to their complaint because of help from the BBRS, which they don’t believe they would have received otherwise.

85% of customers agreed or strongly agreed the application was simple to complete, based on data from those who raised their complaint after the BBRS’ launch. This indicates that as processes have improved, so has satisfaction with the application process.

82% of customers felt that they had received a great deal of help from their Customer Champion (case registration support officer) in setting out their complaint.

The BBRS website lists several testimonials, based on real customer cases, where customers have provided positive feedback about the BBRS and the need for such a service.

2. The SME community is not accurately represented in this statement.

We work with a variety of business groups including the British Chambers of Commerce, the Institute of Directors, the ACCA and ICAEW. These bodies have not expressed dissatisfaction with the service. On the contrary, they have actively promoted the service to their membership.

The independence of our casework

It is imperative to separate the casework from the way the BBRS is funded, to address the mis-interpretations in the SME Finance Report on pages 17-19. It is common practice for dispute resolution services to be funded by a levy on the industry it operates within and the BBRS’ funding model has no bearing on its independence.

Two independent reviews into the BBRS’ adjudication processes found that the casework at the BBRS is fully independent of the participating banks.

“We found that BBRS and in particular, the Chief Adjudicator, has total independence when making determinations on complaints that fall within the Scheme Rules, as far as Investigative Adjudication is concerned”. PIR 1, page 16

“We have found no evidence to question the competence and capabilities of the staff involved in case handling and decision-making.” PIR 2, page 25

Conclusions

In summary, the BBRS was set up as a dispute resolution service for a small section of the SME banking market, within a clearly defined remit. For those SMEs that the BBRS has been able to help, it has achieved valuable outcomes, that these businesses wouldn’t have been able to achieve without the existence of the BBRS. Its data, insight and case numbers do however show that the market it was set up for simply doesn’t exist.

Until a decision on the future of the BBRS has been reached by its funding banks, the BBRS continues to urge SMEs who have an unresolved complaint with their bank to come forward to see if it is able to help them reach a resolution. SMEs can visit this page on the BBRS website to find out more: https://thebbrs.org/lets-see-if-we-can-help/