Small Medium Enterprises (SME) Banking - Thematic Intelligence
Description
Small Medium Enterprises (SME) Banking - Thematic Intelligence
Summary
The need of SMEs are complex, variable, and evolving, which means there are many different types of products, services, and providers depending on the size, life stage, or business area of the SME. One reflection of that is the diversity of players evident in SME banking, with no one player able to manage or control the entire relationship. These include incumbent banks with traditional products; new specialist SME lenders and/or banks; various accounting software providers that seek to disintermediate banks by migrating upstream; payment platforms broadening their solutions and locking in clients with financial and reporting products; the many ecommerce players enabling online sales and financial products; and big tech and social media platforms.
Many new digital banks capitalized on the COVID-19 pandemic to dramatically increase small- and medium-sized enterprise (SME) lending and account penetration. For example, in the UK, Starling increased lending from GBP23 million ($28 million) in 2019 to GBP1.6 billion ($2 billion) in June 2021. New entrants such as Holvi, Tide, and Starling-which map digital resources to existential challenges around growing revenue, controlling costs, and working capital-are managing to capture the hearts and minds of this segment. In response, incumbent banks are working hard to evolve and broaden their SME propositions.
Scope
Summary
The need of SMEs are complex, variable, and evolving, which means there are many different types of products, services, and providers depending on the size, life stage, or business area of the SME. One reflection of that is the diversity of players evident in SME banking, with no one player able to manage or control the entire relationship. These include incumbent banks with traditional products; new specialist SME lenders and/or banks; various accounting software providers that seek to disintermediate banks by migrating upstream; payment platforms broadening their solutions and locking in clients with financial and reporting products; the many ecommerce players enabling online sales and financial products; and big tech and social media platforms.
Many new digital banks capitalized on the COVID-19 pandemic to dramatically increase small- and medium-sized enterprise (SME) lending and account penetration. For example, in the UK, Starling increased lending from GBP23 million ($28 million) in 2019 to GBP1.6 billion ($2 billion) in June 2021. New entrants such as Holvi, Tide, and Starling-which map digital resources to existential challenges around growing revenue, controlling costs, and working capital-are managing to capture the hearts and minds of this segment. In response, incumbent banks are working hard to evolve and broaden their SME propositions.
Scope
- Most small business owners-defined as those who stated they were self-employed or started their own business in the last two years-use their personal account as their primary business account (72% globally).
- Incumbent banks dominate the market share for SME accounts, as they do for personal accounts, at 75% globally. Yet digital banks already have a 20% market share.
- GlobalData’s survey data suggests growing revenue, controlling costs, and access to capital are the three most important business challenges reported by SME owners. Those new entrants that map resource to these challenges most effectively are driving the most engagement.
- Understand key technology, macroeconomic, and regulatory trends impacting SME banking.
- Identity priority application areas for SMEs in the banking space, as well as the vendors and banks delivering these experiences to end users.
- Access case study insight on the leading players within the SME banking theme.
Table of Contents
39 Pages
- Executive Summary
- Players
- Trends
- Technology trends
- Macroeconomic trends
- Re8gulatory trends
- Industry Analysis
- Most small business owners use personal accounts for business purposes
- Incumbent banks still dominate SME the market share
- Quick and easy onboarding drives provider choice
- SMEs face multiple business challenges
- Mergers and acquisitions
- Timeline
- Value Chain
- Idea
- Launch
- Grow
- Ongoing management
- Companies
- SME digital banks
- Incumbent banks
- Sector Scorecards
- Retail banking sector scorecard
- Who’s who
- Thematic screen
- Valuation screen
- Further Reading
- GlobalData reports
- Our thematic research methodology
- About GlobalData
- Contact Us
- List of Tables
- Table 1: Technology trends
- Table 2: Macroeconomic trends
- Table 3: Re8gulatory trends
- Table 4: Mergers and acquisitions
- Table 5: SME digital banks
- Table 6: Incumbent banks
- Table 7: GlobalData reports
- List of Figures
- Figure 1: Who are the leading players in the SME banking theme and where do they sit in the value chain?
- Figure 2: Only 16% of SME owners use a dedicated SME account to manage their finances
- Figure 3: SME owners overwhelmingly prefer traditional providers for accounts
- Figure 4: Drivers of provider choice vary but quick and easy onboarding leads
- Figure 5: Growing revenue, containing costs, and lack of capital are SMEs biggest business challenges
- Figure 6: The SME banking story
- Figure 7: The SME banking value chain
- Figure 8: Who does what in retail banking?
- Figure 9: Thematic screen
- Figure 10: Valuation screen
- Figure 11: Our five-step approach for generating a sector scorecard
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