A new report by Swisscom’s think tank e-foresight and the Institut für Finanzdienstleistungen Zug (IFZ) found that the vast majority of banks are falling to meet consumers’ digital needs, notably when it comes to small and medium-sized enterprises (SMEs).
The report points out how banks can fill the gap between their digital offerings and the real needs of their corporate clients.
The research program compares the digital offerings of 50 retail banks and the needs of 473 SMEs. Most particularly, it focused on five specific areas: e-banking, communication channels, payments, financing and banking-related products.
The study found that 66% of the surveyed banks are late followers, 29% are followers and only 5% are considered as being first movers.
Late followers are those that haven’t launched any digital initiative or that has only launched isolated initiatives in terms of offerings to SMEs.
Followers have proposed their first products and are serving customers.
First movers have advanced rapidly toward digitalization and are at the forefront in term of their digital offering to SMEs.
For e-banking, although a number of banks are already offering solutions, the level of innovation remains low and corporate clients are demanding more digital solutions and functionalities.
80% of banks are offering push notifications via email or text message and 26% are offering personalized homepage. Only 8% are offering accounting software solutions, although 62% of clients said they considered these solutions as being important or very important.
Another area where banks are falling behind is the communication channels. Despite clients claiming that web chat, the ability to book meeting appointments online and video format advisory are important or very important, only a few banks are offering these services.
SMEs are also demanding various digital payments solutions including online and mobile payments solutions, which a number of banks are already providing.
Alternative financing solutions is expected to grow in popularity, and SMEs are requesting online onboarding processes notably to open business accounts (54%), but also for online mortgage applications (29%) and renewal/extension (43%). Less than 10% of banks surveyed are currently offering any of these solutions.
Finally, as for banking-related products and services, SMEs said that are interested in online factoring (17%) while only 2% of the surveyed banks are actually offering this service. 21% of SME clients said they are interested in the possibilities to bundle through business networks, but only 4% of banks are proposing this. Finally, 10% of the banks said they offer insurance products online, while only 5% of SMEs believe this is actually important or very important.
The report advises banks to start considering SMEs as an entirely separate segment in their strategy. Banks should focus on building and delivering solutions that SMEs are actually demanding and offerings that effectively help them, notably in areas that include e-banking and online assistance and advisory. Banks should also develop “an intelligent combination of banking and non-banking services” to build customer loyalty.
“Globally, banks are only at the beginning of their digitalization efforts in products for SMEs,” the report says. “Most of them have been primarily focusing on the retail banking segment.”
“Digitalization is not an end in itself, it must be put in place to better and/or more easily serve clients’ needs. (…) Corporate clients consider the most relevant areas as being solutions and functionalities related to transactions and auto-administration in e-banking, which simplify their daily activities or improve their processes. These aspects demanded by corporate clients are currently not provided by any of the banks.”
Featured image by IFZ
