It is generally believed that the SME market is riddled with risks. Despite being deemed the backbone of the UK economy, it experiences frequent births and deaths as companies are establishedAndAcquired. Nonetheless, the segment represents a growth opportunity for banks.
But, in the words of Accenture, ?to retain a stake in the game, banks must shift focus“from product-push to customer-pull, by fulling embracing the opportunities of a more client-centric strategy. This is because, simply put, a new ecosystem is emerging in finance, with banks competing across industries for the same pool of customers.
It’s advice that HSBC has taken to heart, by announcing a review of its banking tariffs for business customers with a turnover of up to £2m. This review, it suggested, would ensure SMEs would save £13m a year in charges.
This comes after HSBC’s electronic banking tariff, set in place for customers wanting to manage accounts online, was also made available to those with a turnover of £2m and was supported by YouGov research on SMEs turning to digital technologies.
The bank cited that YouGov had found 41?per cent of SMEs?to deemefficiencies created by digital technologiesAsimportant to a business’s future. Also, £36 per cent will become more reliant on technology in the next year.?
The YouGov research also revealed that 41?per cent?of SMEs had grown total revenue in the last year, but that 45?per cent believed’service suppliers failed to support the business as its?requirements change.
“The way that SMEs bank is changing in much the same way as they do business it’s going digital,” said HSBC’s UK head of commercial banking, Ian Stuart. This review will ensure we support more UK businesses on the journey to?growth, as well as while navigating through the post-Brexit landscape. While this comes at a cost to the bank, we believe it’s the right thing to do for our customers.
At the same time, the bank is said to be reviewing its small business customer accounts in an attempt to confirm whether it lines up with business customers” banking behaviour. An estimated 190,000 customers, it said, are set to benefit from the revised tariff threshold and account review, with no business worse off.
Stuart added: “As firms grow, naturally the focus shifts to other parts of the business and bosses?don’t always have the time to prioritise reviews of existing supplier contracts. In some cases this means their initial product or service doesn’t meet their existing or future needs. Business needs change over time, which is why banks should review business customers” tariffs to better support growth.
The rise of the fintech has long been seen as an approaching threat to the financial services industry. But now that it’s arrived, the financial services industry is seeing as much in the way of collaboration as it is in the way of competition.