The legislative and regulatory landscape is expected to see considerable change, said UK Finance, with Consumer Duty expected to bring a large shift in regulated SME lending and banking.

Meanwhile expected changes to the Consumer Credit Act and the Payment Services Regulations are also forecast to change regulation of SME banking and lending.

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Wider elements such as elections, both home and abroad, as well as conflicts in Ukraine and the Middle East have created an element of fragility in business and trading environments.

UK Finance also said the commercial lending sector was coming under further scrutiny through elements such as the Treasury Select Committee review into SME finance as well as increasing stakeholder interest in the market as large — meanwhile lenders and small businesses were implored to consider what developments in data, digital money, open banking and AI might mean to them.