UK regulator highlights need to improve service quality for SMEs in an increasingly complex market
The FCA’s efforts to improve financial services for SMEs will be the subject of the organisation’s annual report, published today. SMEs are the lifeblood of the UK economy, contributing more than £200bn a year, but increasingly feel under-served by banks.
SMEs main ask from banks is financial planning tools and business growth advice, especially money management and cash flow tools. This is according to research endorsed by the SME Finance Forum.
Banks’ provision of these services have become more complicated as fintech and challenger banks increasingly offer financial planning tools and advice to SMEs. Banks are under pressure to salvage their relationship with SMEs as relationship managers spend most of their time, and generate most of their profits, from 20 percent of their client base, neglecting the other 80 percent of business.
Rupa Ramamurthy Vice President for Corporate Banking & Banking Business Services at Intelenet Global Services, comments, “SMEs need a different type of treatment compared to larger organisations who want a broad set of services such as international trade management and advisory services, which banks are equipped to do.
“If I were to put myself in their shoes, the first thing that’s an issue for a small or medium sized enterprises is cash flow. When I speak to small business owners they typically tell you they find it difficult to track and forecast their flow. They require banks to be a strategic advisor and product specialist who can help them to navigate through their cash flow journey and enable them to fulfil their growth ambitions.”
Rupa continues, “84 percent of SMEs want financial planning and business growth advice delivered digitally, but only 17 percent of banks currently offer digital financial management tools. Banks have a real opportunity to capitalise on SMEs’ need for advice, helping small business clients manage risk, business plans and cash flow.”