The challenges of SME banking
Banks across the world face significant challenges in serving SME customers. Broadly defined as companies employing 250 employees or less, SMEs account for around 99.5% of businesses across the G7 countries and over 50% of them are in need of external finance.1 There are significant opportunities in the SME banking market that could be explored to benefit both banks and their SME customers, resulting in wider economic benefit.
A key challenge related to SME banking is the time-consuming and complex onboarding, driven largely by the rigorous know-your-customer (KYC) requirements intended to prevent financial crime. The fragmented patchwork of solutions currently supporting banks’ KYC processes means that they have to integrate and verify a broad set of disparate information for every SME customer. Also, KYC data is only useful if it’s up-to-date. So banks must spend yet more time refreshing and re-verifying their SME customer information, which is costly for them and inconvenient for their customers.