Backbase: How banks can better support SME customers in Q4

By Pim Koorn, Product Director, Business Banking at Backbase

With the fourth quarter quickly approaching, banks are increasingly tasked with the difficult project of evaluating how to best support their small and medium-sized enterprise (SME) customers, all of whom are working diligently to re-emerge from 2020’s challenges and adapt to the new normal that is taking shape.

Responding to today’s current demands means that flexibility, innovation and personalisation are key requirements of any technology partner. Banks are considering how to best provide the customisable solutions their clients need in today’s current environment. SMEs are increasingly seeking partners that can provide the specific working tools that meet their fluctuating requirements. No one SME is alike. Whether they are reaching for new digital invoicing tools or seeking real-time onboarding solutions, banking partners that can best support their customers at every turn in their digital journey will remain a trusted partner during the collective recovery period.

The coronavirus pandemic has also put a newfound strain on how SMEs are managing their day-to-day operations and has significantly shaped the way SMEs are looking at their technology. In a PwC study from April of 469 SMEs on how banks can help businesses manage the rocky waves of the pandemic, the majority of respondents noted that the ability of a banking partner to tailor its support was critical to retaining the SME as a client. More than half of respondents (61 per cent) said personalised customer experience was core to the banking relationship.

These survey results underscore how a customer-centric focus, instead of a product-centric one, is the key to banks being able to optimise client relationships. Banks are already working to better understand their SME customers’ specific ways of working, but being able to efficiently cater to these needs lies in embracing technology and innovation.

By digitising paper-based banking processes, SME’s will be able to reallocate their limited time toward more important business-critical tasks. SMEs spend 74 per cent of revenue on non-core activities like bookkeeping and legal and 26 per cent on core activities that make them money, according to McKinsey. Implementing slick and user-friendly platforms can help banks remove friction and provide a more seamless experience for their clients, creating the efficiencies these businesses require.

Another way banks can help support SME clients is by prioritising optimisation. Digital-first banking platforms help solve some of the day-to-day hurdles that SMEs currently face, with solutions such as digital onboarding, digitised loan applications and digital customer signing processes. By empowering SMEs with the digital tools they need to reduce processing times from days into minutes, banks can make themselves indispensable as value-add technology partners.

Every business is currently looking for ways to streamline their operations. But banks that operate within legacy systems run the risk of not meeting the expectations of modern SME owners. By offering digital-first platforms, banks can provide SMEs with the underlying technology infrastructure that helps take the stress out of their finances. Providing access to secure and seamless mobile money management tools, banks can make SME’s lives easier – from bill payments to invoicing, and payroll to card management.

Lastly, banks that integrate new processes around transparency and real-time data will be better placed to cement themselves as long-term partners. Accessible, actionable data is how SMEs stay up to date, and leveraging real-time liquidity management tools that are backed by reporting and analytics are key to the financial health of these businesses.

With Q4 upon us, banks are understandably focused on how to best support their clients during this pivotal time. And as SMEs turn to technology to help them navigate these challenging times, banks can put their best foot forward by continuing to prioritise digital-first, customer-first services.

Pim Koorn
Product Director, Business Banking
Backbase