To succeed, traditional banks must offer SMEs data-driven experiences

By Puja Sharma

Traditional banks need to build on their product and distribution advantage by delivering digital experiences at scale. While 65% of traditional banks say a key strength is data, more than one-third report losing customers through a lack of data and insights.

The race for SME (small and medium enterprise) customer primacy has reached a critical inflection point, according to a new guide from Pollinate. From talking to nearly 1,000 banking leaders around the world, the latest guide has plotted a path for how traditional banks can accelerate the pace of change by focussing on harnessing the power of data to become the single digital hub for SMEs.

The guide reveals how traditional banks need to:

Remove the causes of SME attrition: The guide shows that traditional banks need to build on their product and distribution advantage by delivering digital experiences at scale. While 65% of traditional banks say a key strength is data, more than one-third report losing customers through a lack of data and insights.

Focused investment for maximum impact: Acquiring could be banking’s sweet spot. For 60% of traditional banks that see BigTech as a major competitor, owning customer data (particularly both issuing and acquiring) could position banks as a strong competitor against these tech giants.

Rethink “supplier” relationships: Traditional banks need to extend relationships with FinTechs from a supply arrangement to collaborating on a range of elements, from initial strategy to the launch of new products and services. 36% of traditional banks are looking for partners that can provide strategic business advice, not just platforms or services.

According to a report by EY, transforming traditional banks of today into the digital banks of tomorrow requires a shift from a product-centric and project-centric approach to one that will deliver tailored, intelligent customer experiences. These proposition-centric capabilities need to be underpinned by a future-ready change to banks’ technology architecture and design.

To ensure maximum flexibility, banks should employ cloud-native, highly resilient platforms comprising modular architectural building blocks, to change their existing technology and architecture.

Fiona Roach Canning, Co-Founder, and President at Pollinate said: “SMEs are fundamental to communities and economies. The race for customer primacy is about becoming the single digital hub for SMEs to manage and grow their businesses.

“SMEs are fundamental to communities and economies around the world. Reducing the cognitive burden for these companies is key to their growth. They need a central hub to manage and grow their business – and banks have all the assets to be in that single place.  Banks are showing that, through partnerships, they can leverage these assets and leapfrog digital disruptors, and Pollinate is proud to be one of their partners of choice.”