In spring 2019, Finastra worked with YouGov to survey more than 450 financial decision makers from SMEs across the UK, gathering insight on this vast segment of the UK business market.
Challenger bank opportunity Thanks to their size, lack of technical debt and digital-first approach, challenger banks believe they can outmaneuver established high street banks. Their agility helps them provide fast, reliable, seamless services to both consumers and businesses. And because challengers don’t have the legacy of a large branch network, thousands of staff, and hardto-replace technology, they have the potential to do all this at a lower cost.
These banks have only started to come to market in the past decade, and many of the front runners specialized in mortgages, meaning penetration among businesses remains limited. Addressing the broader banking needs of SMEs requires a correspondingly broad range of services – something that only a few challengers have recently sought to develop.
Challengers must persuade financial decision-makers in SMEs that they are as trustworthy as established banks and can offer service that’s at least as good. For example, while banking services for consumers, such as current and savings accounts, are free, business banking typically attracts charges. SME banks can incentivize switching by offering charge-free accounts for businesses.
SMEs are no strangers to innovation in banking. Card payments are now commonplace for businesses that for many years prioritized cash. The efficiency of new payment systems is winning out over the cost of cashing up and taking money to the bank each day