In the realm of small and medium-sized enterprise (SME) banking, the focus often leans towards data privacy rather than delivering an exceptional customer experience. However, this approach may need a shift. SMEs represent a vital demographic for banks to revamp and enhance their digital offerings, starting with addressing the pain points these businesses encounter in their financial operations.

One of the primary pain points for SMEs in the digital banking landscape revolves around the challenges of tracking and forecasting cash flows. Additionally, managing account receivables and payables effectively poses significant hurdles. Many SMEs lack access to online tools that can assist them in planning their day-to-day activities strategically, hindering their potential for growth. The digital banking experience must be tailored to directly tackle these issues, providing intuitive solutions for cash flow management and business planning.

Another pressing concern voiced by SMEs is the disjointed and often cumbersome nature of their interactions with banks. Typical small business owners find themselves dissatisfied with the existing business banking platforms, if available at all. These interactions are sporadic, limited to periodic balance checks and occasional payments, with personal engagement with bank relationship managers occurring infrequently. This disjointed experience falls short of fostering a meaningful relationship between the SMEs and the bank, highlighting the need for restructuring both in terms of frequency and quality of interactions.

To address these pain points and foster deeper engagement, banks must aim to increase the frequency of meaningful interactions with SME customers. Transitioning from sporadic monthly or quarterly engagements to several interactions per week is essential. Digital interactions offer a cost-effective and convenient avenue for both parties, while also generating valuable data that banks can leverage to provide tailored services and insights to SMEs.

Moreover, enhancing post-sales services through data analytics enables banks to offer personalised advice on new products and services, identify emerging risks, and provide customised insights relevant to each SME’s business needs. However, these advancements can only be achieved with the right digital infrastructure in place to facilitate seamless interactions.

Transforming mobile banking into a platform for ongoing conversation rather than a mere channel opens up numerous opportunities for banks to engage with SME customers during their daily business operations. By offering relevant insights and product suggestions based on real-time data, banks can encourage SMEs to actively manage their finances and explore new offerings that align with their business goals.

In addition to increasing interaction frequency, improving the quality of these interactions is equally crucial. Banks must shift from merely facilitating transactions to providing actionable insights that empower SMEs to make informed decisions about their financial affairs. By extending the average online banking session duration and offering data-driven insights tailored to each customer’s business, banks can deepen their relationships with SME clients and drive mutual growth.

To reinvent their SME banking proposition, banks must adopt a solution-driven approach that goes beyond traditional product offerings. This entails developing digital solutions and advisory services tailored to SME needs, while also embracing partnerships with third-party providers to enhance service offerings and capabilities. Building robust technology infrastructure to support seamless integration of third-party solutions and leveraging new data sources for product innovation are essential steps in this transformative journey.

Addressing the pain points of SMEs in digital banking and fostering meaningful relationships are pivotal for banks seeking to stay competitive in today’s rapidly evolving financial landscape. By prioritising customer experience and leveraging technology to deliver tailored solutions, banks can strengthen their position as trusted partners in the success of SMEs. As Andrii Hidulian, founder of SME Banking Club, rightly said “It is important for bankers responsible for micro and small businesses to understand the importance of digital banking and innovation in order to stay competitive and meet the evolving needs of small businesses and SMEs.”