Lack of Fair Pricing Preventing Banks from Strengthening SME Relationships, Fraedom Survey Finds
More than half (58%) of banks are failing to provide fair and transparent pricing to SME customers, while nearly two-thirds (60%) are not delivering the desired ‘consumer-focused’ approach, according to a study conducted by Fraedom.
The survey, consisting of over 100 decision-makers in commercial banks including senior managers, middle managers and shareholders found that ‘large enterprises taking priority’ is the biggest hurdle for banks to overcome when meeting SME demands, according to over half of those polled (55%). A lack of relevant technology was also a key factor among almost half (47%) of commercial bankers with low-cost effectiveness being deemed the primary reason by 45% of those polled.
The research discovered that nearly three quarters (72%) of UK commercial bankers referenced SMEs as presenting the largest area of opportunity for growth while only 26% of the study cited large enterprises.
However, the study revealed that the main challenges faced by a bank’s SME customers are access to cash flow to make payments (46%), a lack of easy access to funding (42%) and problems with debt recovery (40%).
When asked what additional steps could be implemented to help strengthen relationships with SME customers, simplify lending processes was noted by half of respondents (50%) while 48% referenced providing more digital platforms as a priority.