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NEWS
Banks fail to cater for SMEs’ personalisation and digital needs
A
new study reveals SMEs are concerned about economic uncertainty before anything else. The study, conducted by Strands, reveals that they are looking for banks to help them
manage and grow their businesses in the future.
Nearly half (46%) of SMEs think their bank understands their financial needs well, and 91% well or fairly well. This knowledge is not applied properly in the range of offerings, however, as 84% of SMEs would like digital tools for financial planning.
Despite this, less than half of SMEs receive planning or budgeting functionalities from their bank – only 34% of banks thought it was necessary, and 17% currently offer any of it. It’s likely that the next year will not fix any of this either as banks continue prioritising digitised transactional services to attract and retain customers.
The result is that nearly 70% of SMEs regard their bank as a utility provider rather than a business partner and a staggering 83% of banks admit that this is the case.
The core transactional services are not enough for SMEs, as 40% cite ‘lack of personalisation’ as a major reason to leave their current provider. Banks don’t seem to be fully are of the issue, as only 17% cited ‘personalisation’ as a reason for SMEs to leave.
Banks are unable to develop these services in the short term, with 83% of them expecting 4-5 years of digital transformation due to constraints in budget, legacy technology and regulatory compliance.
As a result, SMEs (43%) are starting to consider challenger banks instead – 83% of conventional banks believe this will happen soon.
“In a period of intense economic turbulence, the existing relationships between banks and SMEs are beginning to weaken,” said Erik Brieva, CEO, Strands. “SMEs are crying out for personalised financial advice, delivered digitally to help them manage and grow their businesses in times of grave economic uncertainty. Incumbents are failing to meet these needs and are increasingly regarded as a utility; simply a provider of transactional services.”
“Traditional banks are still the providers of choice to SMEs. And traditional banks have the financial intelligence SMEs crave. Banks need to apply this intelligence – digitally, and in a personalised way – to become business partners, and in doing so retain and grow their SME market share.”
National Australia Bank plans 4,000 job cuts in automation push
N
ational Australia Bank is set to cut around 4,000 jobs as it seeks ways to automate its business
processes.According to Intellect, the system will be powered by “an integrated front-
end omni-channel Corporate Banking eXchange (CBX) portal” with backend processors. DTB will also augment the front end of Federal Bank’s existing trade finance portal.
The figure, which arrives after the bank announced a 2.5% rise in net profit, represents around 12% of its entire workforce
“We are reshaping our workforce to enable us to deliver for our customers and by full year 2020 expect to create up to 2,000 new jobs while about 6,000 roles will be impacted as we further automate and simply our business,” said NAB in a statement.
Last year, NAB was found to have used software to spy on customers leaving to join its rivals.
The bank confirmed to The Sydney Morning Herald that it received alerts from credit reporting agency Veda when its customers approached other banks for loans or services.
“
www.ibsintelligence.com | © IBS Intelligence 2017 We are reshaping our
workforce to enable us to deliver for our customers
It followed complaints from an NAB user who received an unsolicited offer from the bank after getting in touch with one of its
rivals.The revelation sparked privacy worries for customers, who feared the bank was exploiting loopholes in the system to monopolise the market.
An NAB spokesperson said at the time that the bank used the reports to “better manage” its relationships with customers.
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