Fewer than half of small and medium-sized enterprises in Scotland believe their bank understands their needs and half think they pay unfair amounts in business banking charges, according to new research released by TSB.

Its report claims annual Scottish economic output could be boosted by £4.6 billion if there was an improved approach by banks.

Few small businesses feel they get value from their bank, the report claimed, while, for Scotland’s SMEs, 40 per cent said the key concern is that banks waste too much time and make errors.

The report noted that just 28% of small businesses in Scotland say they have access to advice and services that give their business the confidence to be more digital, and that 63% of Scotland’s SMEs have no idea what services their bank can offer to help them become more productive.

Across the UK, more than two thirds of SMEs (68%) believe that their needs are being overlooked in favour of larger, more profitable companies.

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The report noted: "Banks must commit to providing face-to-face local business support in the real economy, not just metro economies, thereby ensuring not just those that are digitally savvy, or based in big cities, are able to get the advice and services that can help grow their businesses."

TSB said that the "flagship research" published in Parliament shows the impact of better banking and business services on the productivity of UK SMEs.

Martin Whitfield, vice-chair of the All-Party Parliamentary Group on Fair Business Banking, said access needs to be widened.

He said: "This is an important report which shines a light on the worryingly low levels of confidence amongst the SME community and the regional disparities in SME productivity.

"It shows that a new relationship between banks and businesses is not only possible but profitable too."

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Mr Whitfield, the East Lothian Labour MP, added: "A relationship which focuses on giving SMEs the local support and guidance they need to grow and which offers them the financial services they require to exploit the digital age."

Boosting SME productivity rates is crucial to the UK economy, but SME productivity is flatlining and is now just half that of the UK’s largest companies, the report said.

Technology is still showing concerns, with just under half (46%) using digital marketing software, while for businesses with under ten employees, that number drops to 11%.

It is claimed that a new approach to business banking could transform the productivity of small businesses.

To help firms, banks should help provide access to local advice and support, outline fees and charges and put greater focus on helping small businesses to borrow well.

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Giving SMEs new options of improved banking and business support services could unlock productivity, creating time savings for business owners, as well as opportunities for growth, it is claimed.

Richard Davies,TSB SME banking director, said: “Small businesses are the beating heart of our local communities, but as our research shows, more needs to be done to help them start, run and grow."

The report declared that "even if only one in ten small businesses were to benefit from better banking and business support, the impact on the economy would be significant".

The Boosting Local Business report is an analysis of research, commissioned by TSB, carried out by Oxford Economics in a survey of 550 UK small businesses and by YouGov in a poll of 612 senior decision makers in small businesses.