Since the onset of the recession in 2008, public and parliamentary scrutiny has increased on the way Small and Medium Sized Businesses (SMEs) complain about financial services and, where appropriate, receive timely redress. This is a very important issue that UK Finance is keen to examine in more detail on behalf of its members, SMEs, government and other stakeholders.

While much of what is currently available works well for consumers, this is not always the case for all SMEs. Also, quite rightly, expectations of conduct and behaviour in financial services have increased over recent years, as highlighted by some high-profile cases of fraud and misconduct.

UK Finance has engaged actively on this issue, working with the FCA (submitting a response to their discussion paper published in November 2015), HM Treasury, the All Party Parliamentary Group (APPG) on Fair Business Banking and Finance, member banks and other key stakeholders. The issue was also raised in the BankingFutures initiative which calls for a fair system that addresses the information asymmetries and different perspectives of SMEs and their financial services providers.

The FCA published a consultation in January 2018 that sets out the FCA's proposals to extend the remit of the Financial Ombudsman Service (FOS) to businesses with up to £6.5m turnover, less than 50 employees and a balance sheet of £5m. Presently only micro-enterprises are eligible and UK Finance supports the proposal.

The FCA's consultation acknowledges ?when things go wrong, some SMEs, particularly smaller businesses, struggle to resolve disputes with financial services firms through the courts and have few alternative routes to seek redress? and that 'the practical barriers to SMEs seeking redress through the courts are significant?.

UK Finance agrees. There is also a cadre of more complex disputes that the FOS may not be best placed to resolve, or which may involve SMEs above the potential new threshold of £6.5m. Determining how these should be best addressed is not straightforward but there is clearly an urgent need to address the issue.

Given the lack of any truly comprehensive analysis on the scale and complexity of the issue of finance industry complaints and dispute resolution in the UK SME market, UK Finance has commissioned an independent review of the dispute and ADR landscape. Simon Walker CBE - the former Director General of the Institute of Directors - has been appointed as independent chair by a selection panel comprised of representatives from the Fair Business Banking and Finance APPG and the Federation of Small Businesses as well as the independent chairs of the UK Finance SME Advisory Group and the IFABL Standards Council.

This independent review will consist of an evidence-based, comprehensive analysis of the scale and complexity of banking complaints from SMEs and will recommend effective, practical solutions that will deliver fair outcomes both for SMEs and for the industry.

Simon's review will engage with SME customers who have made complaints, including those with experience of recent high-profile cases involving conduct issues and their related bespoke redress schemes. With support from leading researchers in the field, Simon will also be reviewing international examples of best practice in this area. He is determined that this will be a thorough review with no stone left unturned with all potential solutions on the table.

This independent review will lead to better mechanisms for dispute resolution in future which I hope will build trust between SMEs and their banks.