• Russell Bennett, Chief Technology Officer at Fraedom


• 14.12.2018 07:30 am
undisclosed

SMEs make up the vast majority of businesses across the UK and with many focused on rapid and dynamic expansion, they present mass growth opportunities for commercial banks. However, to really untap this potential and gain trust and creditability with small and medium-sized businesses, banks must begin to adapt their offering specifically for the SME marketplace to complement existing real-time spend programmes. Fortunately, there are several ways in which they can do this. Here, we present five top tips for banks looking to strengthen relationships with their SME customers.

Simplify the lending processes

One of the biggest frustrations, besides being denied funding, is the time it can take to receive funding from banks. This is a key area that banks must address if they are to improve their relationships with SMEs.

In our personal lives, we are so used to being able to access simple online applications and receive almost instant decisions on funding and this is something we are now also demanding in our professional lives. Banks must begin to create simple lending processes which allow SMEs to get faster funding decisions, quick access to these funds and straightforward terms.

Provide more digital platforms

As established, SME clients now expect commercial banks to offer the same seamlessness, digital access and immediacy they enjoy from their personal banking services. As a priority, banks should provide more digital platforms to meet this demand. This is an area in which banks would benefit from working with fintechs who are able to provide technology to streamline financial management processes within SMEs and drive agility.

Additionally, fintech partners can play a key role in working with banks to help streamline the often bureaucratic and time-consuming spend management process within SMEs. Through the supply and delivery of innovative commercial card technology will help SMEs achieve greater insight into their spending and exert tighter control over it.

By embracing the latest technologies, commercial banks will not only improve the experience of their SME customers but will also be able to leverage the technologies to gain an advantage over competitors.

Develop SME specific programmes

Banks must consider what SMEs are looking for, what will help them in the day to day running of their business and what they can do to help SMEs achieve their potential. One of the most effective outcomes is likely to be developing spending programmes and tools with SMEs in mind.

For instance, banks can help businesses gain greater control and visibility over expenditure by introducing Expense Management Systems tools which help create a single financial view. For small businesses, it is vital they have full transparency and control of their spending so by facilitating this, banks would be able to strengthen their offering to these customers. Offering easy access to online statement and reporting tools will also allow SMEs to make smarter business decisions.

Deliver growth

Despite many SMEs currently being held back from achieving their potential, growth is often a key objective for smaller businesses and banks must do more to help them achieve this. This presents banks with the opportunity to expand their offering of commercial cards, for example, which could also fuel growth for banks themselves.

Implement innovative payment methods       

When adopting new payment methods, banks must strike a balance between ease-of-use, ease-of-access, and maintaining stringent security. With consumer payment methods using biometric authentication, such as fingerprints and facial recognition, it won’t be long before corporate clients expect to see the same.

Banks can also strengthen their offering with virtual cards. For SMEs, virtual cards offer flexibility that makes payments more secure, controlled and easy to reconcile. With the help of fintechs, it is also possible to create unlimited digital cards that only exist for single transactions. This means businesses can assign these to employees on a case by case basis, allowing them to quickly make the transactions they need to carry out their job efficiently. 

With SMEs playing such an important role in society and having such an impact on the economy, it is vital that banks make strengthening their relationships with them a priority. As businesses demand a ‘consumer-focused’ approach, partnering with fintechs may be the best way for banks to achieve this thanks to their ability to provide innovative technology that helps to improve a bank’s offering.