The Business Banking Resolution Service (BBRS), established to resolve disputes between banks and their small business customers in the UK, is set to close after operating for three years.  

Launched in February 2021, this service includes backers such as Banco Santander, Barclays, Danske Bank, HSBC Holdings, Lloyds Banking Group, NatWest Group, and Virgin Money UK.  

The BBRS operates independently, serving customers whose cases are too large for the Financial Ombudsman Service. 

In its annual report, the BBRS stated that it had “left no stone unturned in its mission to encourage eligible SMEs to register their complaint”.

By 31 December 2023, the service had resolved 137 cases through various methods including adjudication, conciliation, mediation, or settlement, with £2m of redress recorded. 

BBRS CEO Mark Grimshaw said: “We will inform customers and the public as soon as the banks make a decision about the future funding of the scheme and its expected closure.” 

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The banks have collectively spent £23m to establish the BBRS and an additional £26.5m on operational costs over the past three years, according to Bloomberg.  

UK Finance, an industry trade body, has indicated that the participating banks “are in discussions with the BBRS on the future of the service,” with more information to be announced later. 

Parliamentary debates last year cast doubt on the future of the BBRS.  

Conservative MP William Wragg referred to the service as an “abject failure” while then economic secretary to the Treasury, Andrew Griffith, suggested that the BBRS was “effectively headed for the exit in all circumstances.” 

The Treasury Select Committee, earlier this month, advocated for the BBRS to be replaced with a new independent system.  

The committee’s report agreed that the BBRS should be shut down, citing a perceived lack of independence and poorly formed eligibility criteria as reasons for its failure. 

Furthermore, the committee’s inquiry highlighted the challenging conditions for small and medium-sized enterprises seeking access to finance.  

It pointed to unfair banking practices and “needlessly” stringent financial regulations as significant obstacles to the growth and innovation of SMEs.