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The future of SME banking

The future of SME banking

Minds made for redefining financial services

We have identified dynamic changes in the industry, driven by evolving SME needs and enabled by advances in technology.

Entrepreneurs come in all shapes and sizes, from the funky FinTech start-up or family business on the high street to the home-based manufacturer using 3D printers and the power of the internet to reach new markets. The path from start-up to corporate is no longer linear. The banking needs of small and medium enterprises (SMEs) are changing dramatically, and the banks’ responses need to evolve accordingly. The UK Government and regulators are applying increased scrutiny to the segment to ensure that there is both innovation and competition in the market.

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There can be no doubt that increased access to debt finance and supporting services is required. There are now some 5.5mn SMEs in the UK (representing phenomenal growth in recent years).

These SMEs have a turnover of £1.9tn, covering 51 of all private sector turnover in the UK. We are seeing a growing market with many diverse and complex needs; a market that needs better products, more tailored to financial services.

A tangible example of regulatory action is the recent formation of the Banking Competition Remedies Ltd, an independent body which will administer access to £775 mn of funding for those that can demonstrate they will address SME needs. The intent is clear: to increase access to capital and supporting services to the SME lending market and support the lifeblood of the economy.

At EY, we believe this is a great opportunity for the market — not only those bidding for funding but everyone involved — to re-examine and re-imagine their propositions, putting the needs of SMEs first.

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English

Pages

28

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