Efma’s latest digest, titled “SME Banking: Cracking the Small Business Ecosystem,” highlights key areas of focus that will help banks position themselves as the right partner for small and medium-sized enterprises (SMEs).

“Banks are well placed to be that partner, and some are already creating innovative services and engaging in partnerships and ecosystems designed to meet their SME customers’ needs. But others are lagging,” said Vincent Bastid, Efma CEO. “Almost 70% of SMEs regard their bank as a utility provider rather than a business partner, and new entrants and market disruptors are stepping in to fill the gaps left between what SMEs want and what banks are delivering.”

Drawing insight from recent research, case studies and observations from bankers working closely with SMEs, this digest outlines the main challenges facing banks today when trying to attract SME customers, such as intense competition from new entrants like Alibaba-backed online lender MYbank and Tencent-backed WeBank in China. In other markets, like the UK, 63% of financial services players in 2018 didn’t exist a decade before.

In addition, Efma finds that small businesses have an array of unique and complex business needs that are not being met consistently. Above all, however, SMEs prize seamless access to digital banking and non-banking services that simplify management and support their business development.

So what role can ecosystems play? This report builds on findings from successful partnerships from different regions to show why banks should – and how they can – create a credible ecosystem, or engage with an existing one, to meet these needs. For example, the paper covers CaixaBank’s team-up with fintech Quipu in Spain and how DBS works with Sintel, the largest telecommunications provider in Singapore.

Revealing key recommendations and considerations in part three, this report is an invaluable resource for banking executives trying to ‘crack the small business ecosystem. The digest covers a strategy spanning five areas of focus – being digital, digitizing legacy, experience thinking, digital platform thinking and digital trust – for developing an SME offering, as well as three different ecosystem approaches that have already had success across the industry.

This report is available exclusively for Efma members.

Founded in 1971 by banks and insurance companies, Efma is a global non-profit organization which facilitates networking between decision-makers. It provides quality insights to help banks and insurance companies make the right decisions to foster innovation and drive their transformation. Over 3,300 brands in 130 countries are Efma members.