Accessible and international SME banking
Banking is failing small medium enterprises (SMEs). Options available to SMEs vary dramatically yet rarely fit the bill. With no two SMEs alike, banks – be they incumbent or challenger – are not always able to provide SMEs with the flexible, fast-paced banking solutions they need. And, so far, few fintechs have taken on the challenge.
Banking Circle has spoken to hundreds of SMEs and start-ups, and found that application and set up takes too long, costs are out of reach, credit repayments are inflexible.
As a business that’s passionate about increasing financial inclusion for SMEs, Banking Circle recently commissioned MagnaCarta Communications to carry out research into these potentially fatal issues. The first report was published in June 2019: ‘Financial inclusion for Europe’s SMEs: Building a circle of trust’.
A second report – ‘Circle of trust or out of the loop?’ – was launched at Sibos 2019. This includes insights from some of the people working in the midst of the challenges and the solutions hitting the market today. Speaking to these experts gave Banking Circle first-hand insight, uncovering where changes are happening, the opportunities that exist, and where barriers are beginning to come down to improve SME financial inclusion.
Broadening SME banking horizons
Valentina Kristensen, director of growth and communications at OakNorth Bank said: “SMEs are still not top of the agenda for most financial services providers, but many are waking up to the benefits. They are realising that if they get an SME on board, they will be loyal and bring multiple cross-selling opportunities.”
As our report shows, bringing about real change and better financial inclusion for SMEs requires market participants to work together and develop joint solutions, collaborating to build bridges between individual innovations already in the market.
Roger Vincent, general manager (UK&I) & CIO of Trade Ledger commented: “We are creating a new ecosystem of financial services providers, in partnership with other providers such as Banking Circle, to establish a new era of financial services which will better service customers and SMEs in the banking space. If we better serve the banking space through the incumbents, then the SMEs will benefit greatly as they can access the services they want.”
However, as our latest report shows, the progress and potential achievements will remain limited until further collaboration, communication and joined-up thinking becomes commonplace within the financial services industry.
As with any ecosystem, it must be perfectly balanced in order to function effectively. Only with all types of providers working together in collaboration, not competition, will the banking ecosystem be able to bring financial inclusion to its peak.