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LISTEN: Banking pains for business laid bare

LISTEN: Banking pains for business laid bare

Wednesday 02 August 2023

LISTEN: Banking pains for business laid bare

Wednesday 02 August 2023

More businesses are struggling to carry out basic banking activities, and even some which have stood for long in the community are also running into trouble.

Smaller and non-finance businesses have typically experienced delays in setting up bank accounts locally but new issues are rearing their head which is piling the pressure on operating.

There is a 16 week wait on average to open a business account with one of four local lenders, which is often blamed on lack of staffing and the use of manual processes.

Now, on top of that, an increasing number of account holders are being told their relationship with the bank is over, with insufficient time to open an alternative account while keeping their business on the tracks. 

That exposes a lack of competition between lenders to improve customer experience and therefore a lack of choice for those needing to maintain a basic cash flow in the modern world, according to two people with their ears to the ground.

Diane de Garis, President of the Chamber of Commerce, said on the latest Express podcast there are “at least half a dozen businesses, that are established long trading local big names, that have contacted [Chamber] to raise their concerns about this in the last few weeks.

“We're talking estate agents, payroll businesses, and others where they have pulled money accounts. NatWest and RBSI have given them 90 days’ notice that they're closing all of their accounts - including pooled money - and they're citing that it's a commercial decision based on regulation, and their lead regulator is Jersey.

“Yet their account has been closed due to regulation elsewhere. So we've got banks headquartered elsewhere making decisions that make the situation in Guernsey even worse. 

“I honestly stood to be part of Chamber in the hope that this would improve. And whilst we have removed some barriers along the way, and we've made some small changes, there's some big issues that just means it's getting worse and worse."


Pictured: Diane de Garis wants more information from local traders on their experiences with business banking.

Missing out

Meanwhile Tim Chilestone, Director of bookkeepers TCS, recently said that “the current state of business banking is more like an economic extinguisher” in a critical letter published last week.

He noted that an online retailer who considered moving operations to Guernsey was faced with multiple issues opening and running a bank account.

He later told Express that It took the typical extended period to open the account but they then received notice that the account shouldn’t have been opened in the first place, despite the fact they weren’t offering high risk or unusual products.

They then upped sticks and went to Spain instead where the business, which could have provided around 20 jobs within a couple of years locally, has now grown to employ more than 40 people.

“So that's 41 staff that could have been employed in Guernsey, but he was unable to open a bank account, and he applied with every bank.” Mr Chilestone said. “This is a high net worth individual as well, who normally every institution in Guernsey bends over backwards to help - not interested.

“If that's a one off, then it's sad, but I doubt it's one. There must be other examples of that out there.”

Listen: Ms de Garis and Mr Chilestone sit down to discuss the state of play locally.

Others who have moved to the island have also struggled to access banking because they have no prior relationship with local lenders despite not requiring advanced services.

“They're being hampered at every turn by the inability to access banking. And they don't want anything complex. They don't need a loan, they don't need an overdraft, they don't need a credit card, they don't need a mortgage, they don't need any of that. They just need a bank account where money can go in and out,” he said.

Another issue arose for one of Mr Chilestone’s clients when they instructed their bank to do a mandate change, which details who owns and can use the given bank account. This was requested in July 2022 but it hadn’t happened nearly a year later despite the correct information being provided. 

“It was discovered fairly recently that the mandate had not been updated. When the client then sort of raised a bit of a fuss with the bank they said, ‘oh, my goodness, we're really, really sorry, this is terrible, this should never have happened, we'll get that resolved for you’. The mandate was updated the next day. 

“So they can do it in 24 hours. So why does it take 12 weeks?”


Pictured: Tim Chilestone struggles to understand why processes take so long in Guernsey.

Setting up shop 

The pair agreed that anyone looking to start a business in Guernsey should get to the bank well in advance.

“You need to allow a lot of time, and if you've been running a business elsewhere, I think it will surprise you how much harder it is to run a business from Guernsey, there's just delays and barriers every which way we turn,” Ms de Garis said. 

But Mr Chilestone said the problem extends beyond waiting for an account to be opened.

He used the example of one local bank, laying out its process for a business trading account: “First fill in an inquiry form on their website, then wait for a phone call from them, then receive a questionnaire to fill in, which is an Excel sheet. Return that questionnaire and only then if they're satisfied will you get an application form. Then you fill in the application form, and you return it with all your documents. Assuming everything is done, then it's 16 weeks.

“At that point, they also advise you not to apply with any other banks while you're waiting to hear from them. If they decide to decline your application, that takes 16 weeks as well.”

In the UK setting up these accounts can be done near instantaneously through ‘challenger’ banks such as Starling and Monzo. Some allow people to access services before all the boxes have been ticked. 

“Sometimes they'll ask for more information,” Mr Chilestone said. “But your account is open and active, while you're providing that information on the understanding that if you ignore their requests and don't provide it, maybe they'll restrict your account.”


Pictured: Some local firms have had their relationship with the bank terminated, with banks citing commercial reasons based on regulation.

UK banks have proved to be not only faster but more conciliatory when clients have issues, he added.

“Last time I personally opened a business bank account in the UK was about 10-years ago. It was with one of the high street banks. It took 12 days, and I got an apology that it had taken 12 days in writing because they consider that too long. Their target was six working days. 

Mr Chilestone said a common response to Guernsey business clients running into delays is “very much ‘that's how long it takes’.

“One bank will tell you it's because we don't have access to beneficial ownership information. Another bank will tell you all our account openings are done in the Isle of Man and they're very busy. Another one will say our accounting is done locally, but we're short staffed and don't have time. It's always a different excuse.”

Ms de Garis concluded that more work from all quarters is needed to address issues which are “getting worse all the time.

“We need government to step in, we need the regulators to be involved in this - all the stakeholders to be part of this to move it forward.

“I just want us to have the same service that we would get if we banked with the high street banks in the UK, and I don't really think that's too much to ask.

“We see it on an everyday basis from the setup phase to just trying to get a mandate change later on in business life… it's just painful.”

Chamber of Commerce has launched a survey to establish how widespread the issues are, with the fresh data to be used to lobby stakeholders.

Economic Development say it is aware of the issues and is investigating measures, along with Home Affairs, to ease future woes.

Are you experiencing business banking issues in Guernsey? Feel free to get in touch through


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