-
-
Link Copied
Recent studies reveal that SMEs are more digital than ever. In the past year, online banking has climbed by 43% in this segment and mobile banking usage by 40%.
Financial institutions need to better serve small-business clients
Recent studies reveal that SMEs are more digital than ever. In the past year, online banking has climbed by 43% in this segment and mobile banking usage by 40%.
For SMEs, digital banking has not only become a convenience but also a necessity for businesses to improve efficiency, reduce costs, and enhance customer engagement.
Financial institutions must go beyond offering basic services to this segment, as SMEs require more than standard banking services; they seek personalized solutions tailored to their unique needs and business objectives.
To achieve those goals, SMEs need a financial institution equipped with tools for financial planning, quick access to funds, and market insights among a few.
Digital SME platforms can reduce costs by up to 50% while increasing reach and customer satisfaction.
Technology has transformed the way financial institutions serve SMEs. Cloud banking platforms, digital tools such as AI support, and real-time data analytics allow Financial organizations to assess and serve SMEs efficiently and profitably.
Speed and efficiency: the fintech factor
Fintech disruptors such as ebankIT have entered the SME space with agile solutions, setting new standards for speed, accessibility, and customization. By partnering with such fintech, commercial financial institutions can innovate faster, scale up, and deliver holistic offerings.
From onboarding to loan approvals, time-sensitive services are crucial for SMEs that are juggling tight timelines and dynamic business operations.
By recognizing these priorities, financial organizations can partner with a fintech to develop strategies to more effectively address SME requirements, promote growth, and enhance customer loyalty.
1. Generative AI
Artificial Intelligence (AI) is a pivotal strategy for streamlining financial operations and enhancing customer experiences. Simplifying access to complex data (e.g., product discovery and recommendation) will save time and human resources in the long run.
But AI extends beyond automation or machine learning, taking the form of hyper-personalization. Existing ML tools predict marketing offers for specific segments but are hard to operationalize quickly. Gen AI aids in creating personalized messages at scale, enhancing customer experience, retention, and cross-sales.
It can transform customer interactions, offering personalized advice and support in real-time, 24/7. AI enhances overall customer satisfaction by finding answers in large corpuses of data, summarizing them, and assisting customer agents or supporting existing AI chatbots. Additionally, AI can expedite the resolution of credit card fraud, benefiting both customers and customer service agents.
To overcome the challenges that limit organization-wide deployment of AI technologies, banks must take a holistic approach.
While AI is already widely utilized for various purposes, such as automation and predictive analytics. Its use will keep on growing beyond transforming operations. It definitely opens up new avenues for growth and differentiation, especially for financial institutions that desire to appeal to SMEs.
Financial services leaders are no longer just experimenting with Gen AI; they are already building and rolling out their most innovative ideas, and traditional financial organizations need to step up to compete.
2. Embedded finance
The potential of embedded finance lies in its ability to offer customized, context-aware financial services. For instance, businesses utilizing e-commerce platforms could integrate payment and credit solutions directly within their sales processes, thereby enhancing operational efficiency and customer satisfaction.
47% of SMEs would be willing to pay the same or more for embedded finance compared to traditional banks
Banks have the chance to engage in this growing sector by connecting with SMEs via digital platforms using their current banking services, or by developing new offerings to capitalize on the platforms’ user bases.
For instance, Uber partnered with Evolve Bank & Trust and the rapid payment firm Branch to introduce a debit Mastercard that enables drivers to receive payments more quickly and earn fuel purchase rewards.
Embedded finance allows SMEs to access financial services precisely when needed, eliminating the need to start a separate process in different interfaces, like logging into another site to conduct a bank transfer or completing a loan application.
Financial institutions can broaden their distribution reach while keeping operating costs low by collaborating with software platforms, marketplaces, and retailers that have direct access to thousands of small businesses and millions of consumers.
In the future, we can expect SMEs to require a fully integrated platform from which one can access not only financial products but all the services one needs to run a business. Such is the case for retail segments in Asia for instance with the Super App Wechat.
3. Data harmonization
Hyper-personalization is undoubtedly the future of banking. By adopting customer-centricity and product-centricity and analyzing customer data to derive actionable insights, financial institutions can successfully navigate their journey toward hyper-personalization.
Studies show that SMEs value personalized financial advice as much as the retail segment. According to EY, SMEs are demonstrating openness to data sharing, with 50% indicating a willingness to pay for personalized, enhanced financial services.
Integrated data analysis provides insights that can inform strategic decisions and smoothly manage financial operations. Machine learning algorithms can analyze historical financial data to identify trends, predict future cash flows, and offer valuable insights for decision-making, offering predictive analytics and forecasting.
This translates into a more strategic approach to budgeting, investment planning, and risk management for SMEs. Financial institutions use platforms like ebankIT to provide SMEs with the tools to make data-driven decisions.
This synergy of technology and data is fostering a responsive and adaptive banking environment that aligns more closely with SME needs.
Support business banking clients at reduced costs
SME banking is no longer a niche segment and financial institutions must act now to capitalize on this opportunity by investing in technology, fostering partnerships, and addressing SME needs holistically.
Technology advancements have made it easier than ever for platforms to offer financial services with reduced entry and operating costs.
A modular digital platform allows banks and other financial institutions to swiftly introduce new products, adapt to market changes and demands, and effectively drive growth.
Digital platforms may be able to offer SMEs less friction and superior user experiences than traditional players.
Want more insights?
How can corporate banks meet the evolving expectations of their clients and use digital technology to enhance the work of their skilled relationship managers? Our report will help you answer these questions and build a growth strategy for a dynamic, fast-changing and hyper-competitive market.
%20without%20SAM%20-%20Maturity%20Level%20-%202-KO%20edit.webp?width=160&height=57&name=67768-ebankIT%20Platform%20-%20CMMI%20Development%20V2.0%20(CMMI-DEV)%20without%20SAM%20-%20Maturity%20Level%20-%202-KO%20edit.webp)
.svg){kind=small}
.svg){kind=small}
.svg){kind=small}