Starling and Funding Options Support SMEs with Quick Loans | Banking
It’s no secret that SMEs play an important role in the UK economy. Since 2020, there is 5.9 million SMEs in the UK, contributing around 50% of its GDP. It goes without saying that the pandemic has put SMEs in a precarious position. Empowering them to grow again will be vital to the UK’s recovery – they hold the key to our GDP, the labor market and their communities. But for SMEs to play their role in the country’s economic recovery, investment banks will have to play theirs.
While it has become easier for individuals to access and manage our money, thanks to the rapid digitization of the retail banking industry, so has corporate banking. Access to credit is a major issue for SMEs, often pushing them towards self-financing or other expensive options. This not only leaves a void in the market for digital disruptors such as eBay to fill, putting the banks in withdrawal, but above all, it also leaves SMEs on the back burner.
Faster and more efficient access to credit will be the main engine of SME growth, but merchant banks as we know them today simply cannot deliver this at the pace the economy needs. Instead, banks need to completely rethink the way they operate, drawing inspiration from the books of their retail siblings – and there’s no better time than now.
When spring rolls around
With restrictions slowly but steadily easing, the UK is on the way back to normalcy. Most people desperately want to return to restaurants, shops and social events. Add that to the accumulation of unspent money due to lack of spending on socializing, travel, and other recreation, and we have a potential windfall on the horizon, thanks to pent-up spending demand.
It helps to imagine the economy as a coil spring, ready to unwind and exert a significant amount of energy and demand through the banking system in just a matter of weeks. SMEs seek to capitalize on this growth – creating a very real and even more immediate need for banks to offer them easier and faster access to credit.
This process has traditionally been lengthy. Investment banks have lagged behind digital. However, whether out of necessity or rebirth, the industry is slowly but surely moving in a more efficient and digital direction.
Digital is the way
Corporate banking has always been a game of relationships. The pandemic has forced a shift from a paper-intensive face-to-face bank to a remote, digitally empowered system – a hard pill to swallow initially. Digital banking features, such as instant transactions and digital signatures, now provide customers with a more efficient Customer Experience (CX), replacing in-person interaction with speed and simplicity.
Business banking needs to move from slow to fluid. Currently, many customers are stuck in digital limbo – with some banking services available online, while others continue to require in-person or over-the-phone appointments. Even before the pandemic, customers preferred the convenience of delivering digital-first services – it just wasn’t always an option for corporate clients. Today, however, customers expect to be able to choose from a menu of digital banking options as standard, from credit applications to instant transfers. Investment banks must observe and learn from their retail counterparts, where successful CX is fully integrated and connected, if they are to keep their customers satisfied.
A bank that goes further
Every business is unique. It is essential that banks take the time to understand them, their sources of income and their aspirations. However, lenders cannot be expected to recognize the potential or risk associated with today’s many diverse and innovative business ideas. Merchant banks must harness the power of customer data to accurately assess the prospects, needs and credit risk of each business efficiently and quickly. Using insight from predictive customer data to actively advise customers is a natural progression and will be a differentiator in the market.
This is all the more crucial given that many SME clients do not get the personal relationship they want and need from their bank as the economic spring unfolds. It’s not the individual’s fault – an account manager typically has 30 to 40 clients. When they’re so scattered, it’s easy for businesses to slip through the cracks. To avoid this, artificial intelligence and machine learning solutions can help banks better manage their diverse lineup and growing customer base, especially as more businesses are knocking on their doors. Using these technologies, customers can get personalized recommendations on the current opportunities, products and services that are best for them.
Develop an ecosystem
To truly consolidate their value in the SME market, investment banks will have to think outside the box. Anyone who is involved in running an SME knows that it is far from easy. This process is made more difficult by the long list of separate vendors required to keep the cogs going.
From merchant banks to credit, to insurance and payroll providers, to accountants, there are many moving parts. This inefficiency represents an important opportunity for the future-oriented investment bank. Thanks to the power of open banking and the proper authentication, it is possible to consolidate these services. By streamlining business processes, customers can focus on the core of their business, while banks are intelligently positioning themselves as valuable catalysts for this ecosystem. Again, this takes a leaf from the retail bank’s book. But more than that, it’s just about getting where customers want and need their bank to go.
The next generation of banking
In this post-COVID era, we are sure to see the continued emergence of digital corporate banking. It will not just be a bank that offers online loan applications and digital documentation, but a bank that offers transparent CX, deeper customer understanding, proactive, data-driven advice and a connected business ecosystem of products and services to solve every problem. potential problem.
The impending boom in digital corporate banking can only be a positive thing – for banks, their customers, and for the economy at large. In the future, the priority should be to reduce friction: if it is easier to get credit, it is easier to start or grow a business, then to hire, spend and offer your services to others. In turn, the UK economy will thrive – and the SMEs that form its backbone will live to see another day.