Boosts for start-ups

The largest ever seed funding competition for start-ups has been launched in the UK, which will give them the opportunity to apply for a share of a £1.8m investment fund.

The successful firms will be selected by experienced investors, with the winners gaining support from an Investment Director and obtaining significant media coverage. Entries must be in by Sunday, 16 October

Meanwhile, in separate news, HSBC has unveiled plans to cut small business charges by £13m, as the big banks are increasingly under pressure from fintech start-ups to cut charges to small businesses.

The bank said it will scrap or cut back on many of the charges for the small firms who bank with it, saving them an average of £70 a year. It has also promised to extend its electronic banking service, which has fewer charges, from firms with a turnover of £500,000 or less to businesses with annual sales of up to £2m. This will mean 35p charges to make direct debits will now be free and charges for ATM withdrawals will also be scrapped, among a number of other fees.

According to HSBC, the changes will benefit 190,000 customers and a spokesman added that the bank will review customer accounts every 12 months to make sure they are on the best tariff for their business.

Established banks and financial services companies are coming under increasing pressure from a number of more nimble start-ups, which have attracted billions of dollars of investment. In fact, new research shows that global investment in fintech companies totalled $9.4bn in the second quarter of the year.

UK financial services watchdog the Competition and Markets Authority’s (CMA) said that “older and larger banks do not have to compete hard enough for customers’ business “.

The CMA added that only 4 per cent of business customers switch to a different bank in any year, adding that small firms could save around £80 a year by merely switching their provider.