The £150,000 compensation limit the ombudsman can impose on finance firms could be increased after a review was launched today.

The cap is to come under the microscope as part of a probe into how financial services firms treat their small business clients.

The FCA has launched a public survey asking if it is doing enough to protect small businesses, which it said are a cornerstone of the economy.

An FCA statement read: “When things go wrong, SMEs may experience complex and escalating problems, and may struggle with the complaints and claims processes.

“The FCA paper seeks views on whether the amount of redress the ombudsman can order financial services firms to pay should be increased from its current limit of £150,000. Currently only a small minority of SMEs are unable to take complaints to the ombudsman.

“However, the businesses unable to do so account for a substantial share of the sector’s demand for financial services, and some of them are likely to be less experienced dealing with financial products and services despite their greater size.”

It added: “The FCA’s own research has found that complex products, limited choice and poorly managed expectations may expose SMEs to risk.”

The regulator has asked for views on whether the level of protection provided to small and medium sized enterprises in its Handbook of rules and guidance is broadly right.

Christopher Woolard, director of strategy and competition at the FCA, said: “Small businesses are a vital part of the UK economy. We need to consider whether we’re doing our part in delivering an effective, proportionate regulatory framework that gives them the confidence required to use the financial services they need to grow.

“We want people to tell us whether our rules are appropriate: do they strike the right balance between protecting small businesses and encouraging firms to offer services to SMEs, to compete and to innovate?”

The FCA is also considering whether the industry could use voluntary standards such as the Lending Code to further improve the experience of small businesses, and asks what the high-level ambition for such codes should be.

The discussion paper follows a number of issues with the way some financial services firms have treated their SME clients, and the provisional findings of the Competition and Markets Authority into retail banking.

Those with views or evidence are asked to send them to the FCA by 18 March 2016.