• Adam Gable, Senior Product Director at Temenos


• 05.08.2026 08:45 am
#SMEFinance #BusinessGrowth

The contribution small and medium-sized businesses (SMEs) make to the UK economy cannot be understated. Accounting for a staggering 99.2% of the UK business population, they act as a critical driver for overall economic growth across every corner of the country. 

Banks are increasingly recognising the need to support SMEs with modern tools that help them grow and manage finances with confidence. Recently, Lloyds announced a partnership with Stripe to deliver new payment tech to SMEs. With tools including Tap to Pay on smartphones, payment links and modern terminal devices for in-person payments, the collaboration demonstrates how modern strong financial partnerships can fuel SME growth. 

The banks that are succeeding in the SME market are moving beyond transactional banking to become genuine financial partners. Personalised banking experiences help banks to better understand their customers, enriching a partnership based on trust rather than custom. When SMEs have a good relationship with their bank, it allows banks to get under the hood of what their SME customers really need. They can offer tailored banking experiences that align with business need rather than providing a stagnant one size-fits-all model. 

Banks need to close the perception gap between transactional services and strategic growth in a partnership with SMEs. That will require banks to rethink how they engage with SME customers and demonstrate value beyond day-to-day services. 

So, here’s what banks must prioritise to strengthen SME relationships and position themselves as trusted partners in their customers’ growth journey.  

Hyper-personalisation: from reactive banking to predictive insights  

SMEs are currently navigating a minefield of increasing competitive pressures, rising costs and market volatility. Traditionally, relationship models with banks have been largely reactive. Today, banks that are modernising through advances in AI, data analytics and cloud-based banking technology are redefining what it means to be a banking partner for an SME. This has enabled them to provide more personalised experiences based on a deeper understanding individual business performance and customer behaviour.

For banks, the most valuable and lasting partnerships with SMEs are increasingly those that can anticipate needs rather than simply respond to ad hoc requests. Proactive product recommendations and offering tailored financing options can help businesses identify opportunities and mitigate risks.

Hyper-personalisation is rapidly moving from a differentiator to standard expectation. As a result, the banks modernising their core foundations will be able to deliver the personalised, predictive services SMEs expect in the era of digital banking. By leveraging data intelligently, these institutions can move beyond basic transactional interactions and become trusted partners that support business growth at every stage of the enterprise journey.

Unlocking growth through deeper banking relationships

Many SMEs are not taking full advantage of the financial products and services available to support their growth. Research from Temenos shows that the average number of products-per-customer is just 2.59, suggesting that many businesses may be missing opportunities to streamline payments or access funding. In a current economic landscape defined by volatility, making better use of these advanced tools can provide SMEs with a valuable competitive edge – and deepen the relationship with their bank. 

Increasingly, banks are being judged by how effectively they can connect businesses with the right solutions at the right time. Real-time financial insights are becoming a key differentiator in SME banking, enabling more relevant and timely recommendations based on a company's unique goals. For SMEs, this means easier access to products and services that better align with their daily operational needs. 

As banks continue to modernise their technology platforms to focus on hyperpersonalisation and harness data more effectively, businesses stand to benefit from a more connected, intuitive banking experience that supports growth, resilience and long-term success.

A hybrid model for SMEs’ digital future 

The future of SME banking isn’t solely digital, it’s hybrid, combining robust digital capabilities with human advice. Digital offerings and transactions are critical to this, but SME clients continue to value a human touch at pivotal moments. The winning models are the ones which combine strong digital propositions with relationship managers (RMs) who can orchestrate the full experience.

Although most banks already have digital journeys in place, AI offers the next step-change to make those journeys smarter and more responsive for clients and RMs alike. Fragmented, manual processes can become end-to-end digital workflows that enable straight-through processing across onboarding, lending, payments, and investments.

But digital alone is not enough. SMEs need the flexibility to self-serve for straightforward tasks while accessing informed, proactive advice from RMs. In the most effective models, RMs are fully integrated into the client’s digital journey. They have visibility into key client actions and use digital tools that enhance productivity and anticipate client needs. In the winning models, the digital and the human complement each other, rather than replacing. 

At the same time, SME ecosystem competition is intensifying. As digital marketplaces and commerce platforms embed banking services into their offerings, lending risks becoming a commodity, which can weaken banks’ relationships and reduce their influence with SME clients. Banks will need to make strategic decisions about where they can provide the right client services and when to double down on advisory moments when depth and trust are crucial.

For banks, digital transformation has become table stakes in deepening the value proposition for SMEs. But the differentiator is a hybrid operating model that embeds AI into core workflows and focuses RMs on moments of truth.

Helping banks unlock sustained growth with SME customers

For banks, the right customer partnership can be a powerful growth lever. Through core modernisation, banks should be able to provide more than just the basic financial infrastructure. It should offer the real-time insight and advanced tools (combined with human advice) to help SMEs make smarter decisions and operate with confidence.

Rather than waiting for a business to ask for support, the strongest banking partners are the ones who anticipate SME needs and highlight potential risks.

Looking ahead, growth for SMEs will increasingly depend on the strength of the partnerships around them. Banks that can move beyond the outdated transactional relationship model and deliver personalised, proactive support will be the ones best placed to help SMEs pull the growth lever, unlocking opportunities for consistent, joint growth.