Description
The small and medium-sized business (SMB) market has long been underserved by banks. Despite being the backbone of the global economy, making up the vast majority of all businesses and employing half of the world’s workforce, SMBs account for less than a quarter of all bank lending, according to the report “The Five Maturity Levels of SME Banking: A Journey from Digital Transformation to Disruption” by Qorus and VeriPark. While global fintechs have driven innovation in the SMB segment, traditional banks have been slow to adopt these advanced practices.
It’s time for that to change.
New entrants in financial services have shown that, with the right technology, they can meet the needs of SMBs while generating significant profits. Traditional banks have the same opportunity, and this report aims to show them how.
The report presents a capability standard that helps banks not only assess their current level of SMB banking maturity but also strategically plan their next leap forward. Experts provide detailed insights into the characteristics and practices needed to track growth and unlock potential in the SMB space, along with best-practice examples from pioneering institutions.
Building the model was a complex process.
A team of experts from VeriPark and Qorus, along with a steering committee of SMB banking leaders from around the world, came together to examine six key aspects of the SMB segment and evaluate them across five levels of maturity. After countless hours of discussion, they developed a best-in-class model designed to benefit banks globally.
Key figures from the report:
- 67% of surveyed global banks cited resource constraints as one of the biggest challenges to innovating and expanding SMB banking services.
- By improving risk models and making more consistent decisions, banks can reduce non-performing loans (NPLs) by 25%.
- Only 3% of banks rated themselves as the most mature in onboarding.
- 67% classified themselves as least or less mature.
- 76% of banks said investing in new technologies and automation to improve customer service is their top priority for enhancing their service mode.
- 47% of SMBs believe banks don’t understand their challenges.
- Only 9% feel their bank meets all their needs.
- 54% of bank executives said credit underwriting is currently a major challenge.
- 33% cited regulatory barriers and compliance requirements as obstacles to innovation.
