Banking is undergoing enormous change, and whilst the bricks and mortar are the same — the banking sector is a money-making business after all — nothing about the design, or the look and feel have any resemblance to the banks that have been and gone.
According to FIS Global's 2018 PACE (Performance Against Customer Expectations) Report, 43% of SME banking transactions in the UK are completed digitally, and 60% of SMEs increased their use of digital transactions in the past year. In the US, the same report shows that 42% of SMEs use their mobile banking app (online and/or mobile) more than a year prior, but interestingly, far fewer small businesses are planning to jump ship, with 8 out of 10 SMEs satisfied with their banking provider.
It’s About More Than Just a Business Bank Account
In the world of banking for an SME or freelance until now, the best you could hope for was to open a business bank account, get an SME loan and cross your fingers. Financial literacy was a long shot and the financial, and overall success of your company was little more than a case of the luck of the draw.
During 2017, we have seen numerous advances in technology and the introduction of new regulatory policies that are reshaping SME Banking. Despite still being an underserved segment of sorts, digitalisation, machine learning and open APIs have opened up previously unimaginable opportunities for banks to get closer to the SME customer.
While no one can see the future, we asked SME Banking experts to share their predictions with us. Here’s a preview of what the best in Fintech have to say about the coming year in SME Finance Management.
The key to serving the SME is to understand their plight. Despite accounting for 99% of all businesses in many countries around the world - in the UK alone, there are 5.4 million SMEs - they have been all but left out of the equation by banks. In this post, the aim is to break down the particular needs of this segment and suggest fitting solutions.
SMEs are no longer an afterthought for banks. They now represent a lucrative money-spinner, and we’re not talking about loans. We’re talking about digital tools that SMEs not only want, but are crying out and willing to pay for.
Banks are in an enviable position, as they have an unrivalled platform to offer SMEs what they want and to tap into a new revenue stream. But first, they must ask themselves these five vital questions.