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What Banks Need to Provide Their Potential SME Customers – a Bank for Life

The SME sector could provide the banks with a very lucrative opportunity if they work properly to entice them as customers. However, at the moment, banks are losing out to other financial providers as SMEs look elsewhere for money and support.

Blog,
Kam Chana – Senior Digital Strategist

What is for the size of the opportunity? $850BN in banking revenue, $14BN in accounting profit, approx. 7% per annum growth over the next seven years, $850BN in banking revenue, $14BN in accounting profit and $10BN a year in economic profit; a large market opportunity by any measure.

These are some of the points often made to Temenos when we speak to SMEs about what they expect from their bank.

“I want better visibility over my operating capital and forecasting”

“Cash management and late payments are a challenge”

“We felt like their finance packages would suffocate us”

“We need real-time data and insights”

“I find it difficult to manage my cash flow, I don’t if I’ll get paid when I expect to and if I’ll have enough to pay these invoices when they’re due.

I want to grow but investors aren’t interested unless I can get a handle on my finances and show them I know what my future positions will be”

Banks Need to Change the SME Narrative

Trust is at the heart of all good business relationships after all… except when it comes to banks and SMEs. SMEs often don’t consider banks an option when growing their future at the moment.

Obviously, we want to change this narrative given that an SMEs biggest challenge is finance and forecasting cash flow and banks are perfectly placed to help. SMEs always look elsewhere though. Why? Because they feel excluded. So the bottom is that SMEs need support. Scaling up and expanding to new markets means they experience severe growing pains and a very real need for a shoulder to lean on.

But banks are often perceived to be more of a barrier than an asset, and many of them dismiss SMEs until they’re fully grown, with revenue to match. So instead, SMEs turn to other funding sources such as Angel Investors, friends, or crowd funding.

SMEs also believe that many banks don’t keep themselves up to date with the kind of products and expertise that SMEs need, unlike Angel Investors and Venture Capitalists. So it’s a no brainer that SMEs would rely on the more relevant option.

But times are changing. Temenos is the solution provider to disrupt old banking preconceptions. We will help banks support SMEs, fully invest in their future, and become their Bank for Life.

Temenos enables banks to support SMEs at every stage of growth by investing in product innovation, securing customer satisfaction, making banks relevant – and winning back trust and respect.

Real-time financial data is essential for business and cash management. A balance between detail and efficiency is needed when reviewing data to enable rapid yet reliable evaluation and decision-making.

Bespoke solutions are purchased when all tools on the market are deemed inadequate. Yet these often fall short of expectations – with limited capacity for integration to other tools, slow operating speeds, a lack of flexibility and high development costs

As they scale to become multinationals, they aim to reduce the number of tools by consolidating and standardizing systems across subsidiaries. This process is time-consuming and costly – a major pain point with very few satisfactory solutions/systems.

The biggest challenges for SMEs are business finance management and forecasting cash flow. Banks are perfectly placed to help, but SMEs believe that banks tend to ignore them and instead concentrate their attentions on well-established businesses.

Temenos is passionate about enabling banks to help SMEs at every stage of their growth by investing in product innovation and securing customer satisfaction.

Temenos is ready and able to help banks to support SMEs and fully invest in their future, by making banks relevant to SMEs.

The next Innovation Event is coming up on 24-25 November: Temenos SCALE is a global Developer Conference for the Banking industry with guided Hands-on Labs, Free Certification, Roundtable discussions and much more.

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Blog,
Kam Chana – Senior Digital Strategist