When It Comes to UX, SMEs Are Often Overlooked

Digital is the future — it’s time for banks to fully embrace it.

Small and medium-sized enterprises (SMEs) are the backbone of the EU economy, employing 100 million people and contributing €15 trillion to the GDP. Nevertheless, they face an uncertain future — this year alone, they’ve been hit by increasing inflation, a recessionary climate, and rising energy prices.

Nearly 70% of SMEs reported falling revenues, and 20% struggled to meet their basic financial obligations. But while the SME market has gradually been shrinking, banks continue to face the challenge of attracting and retaining good customers.

In An Increasingly Connected World, Banks Are Letting SME Clients Down

Findings from a 2021 survey conducted by digital banking engagement platform CREALOGIX indicate that nearly 60% of SMEs in major EU markets like Germany and Switzerland are deeply unsatisfied with their banks’ digital user experience (UX).

Furthermore, an overwhelming 90% of SMEs feel that their banks should add more features and services to their digital platform, including online finance management. In a nutshell, respondents across markets were unanimous in their displeasure with the current state of digital banking in the EU.

Customers are Flocking to Digital Challengers

In 2023, the modern online banking landscape remains diverse. Across the EU and beyond, there are still many banks without any form of online banking available. Conversely, others have advanced their offering to include differentiated online banking channels for individual and corporate customers.

In a recent study conducted by our team, we examined a total of 23 banks in Romania that offer products for individuals and companies.

Our findings showed that while it’s generally true that the larger the bank, the more channels and features are available, there are significant exceptions to this rule. Namely, there are still a number of prominent Romanian banks that don't offer a mobile banking app, while some of the country’s smaller banks already deployed them years ago.

Furthermore, from the customer segmentation perspective, most banks currently offer the same channel for individuals, SMEs, and corporate customers. Most features are common to all customers, while others are specific to individuals (like utility payments) or legal entities (such as payroll processing).

Optimized UX Requires Thorough Planning

Banks have much to gain from implementing a UX overhaul for their SME clients. The core advantages of improved digital experience include:

  • Staying competitive: Banks can ward off challengers seeking to become the primary banking partner of SMEs.
  • Upsell opportunities: Having improved UX in place can aid in convincing clients to make use of additional products and services.
  • Maximize acquisition: Great UX gives banks the ability to improve low-cost customer acquisition through referrals.

However, the task of revamping one’s UX is easier said than done. As we’ve explained above, SMEs are incredibly diverse clients, and they each come with their own set of unique, contrasting requirements. To illustrate this claim, here’s an example: The needs of a small retail chain are vastly different from those of a construction firm or a digital service provider.

In order for banks to meet the needs of their SME clients, it’s crucial that they determine and implement a customer segmentation strategy. When segmenting their customers, banks have the means to provide targeted services and boost satisfaction levels. Additional tools including surveys, market research, and big data analyses can also help banks gain vital insights into SMEs’ current expectations from their banking partners.

Here are several solutions that banks can make use of prior to setting up a customer segmentation strategy:

  • Improve basic features like payment flows
  • Increase engagement by involving customers in their digitalization journey
  • Reduce in-person visits to the branch by digitizing commonly used  flows
  • Adopt advanced security solutions that reduce friction

Beyond Banking

Now that we’ve outlined the benefits of revamping online banking UX, we can’t forget about the potential that can be unlocked through the adoption of online banking.

Using open banking practices, banks can create a next-level interconnected ecosystem that brings together the best of traditional banking and open banking. These solutions provide clients with more freedom and control over their accounts as well as easy access to additional features and services.

Despite their many visible flaws in the digital arena, traditional banks still have a number of significant advantages that they can make the most using the right tools. Using each of the above strategies, today’s banks have plenty of options. They can either develop these features and processes in-house, or alternatively, forge strategic partnerships with third-party platforms.

To learn more about the opportunities made possible through revamping online banking UX for SMEs, download our complete report.

Ghenadie Dumanov
January 9, 2023