In a world of cross-border business, SMEs have more complex financial needs than ever before. Banks are harnessing data to better understand their SME customers and creating innovative products and services to meet their unique requirements.
According to the Freelancing in America 2017 report by Freelancers Union & Upwork, the majority of the U.S. workforce will be freelancers by 2027. Moreover, the trend seems to be similar in other developed countries around the world led by Asia Pacific, Nordics, UK and is expanding across regions. Banks should therefore focus more on this segment and create an attractive value proposition for the whole micro segment. This trend will bring a huge number of unbanked entrepreneurs looking for financial business partners and they will definitely be looking far beyond traditional banking services. There will be millions of them with unique needs and priorities. Subsegmentation, targeting and a complex view of customers will make the difference.
Emerging neobank players
After a number of successful examples of market penetration by neobanks in retail financial services (Revolut, N26, Ant Financial and Monzo), the focus will shift to other segments, with SMEs and Micros at the top of the list. The augmented value propositions for SMEs of such players, with their specific capabilities and features, have already been launched in various markets in Europe, the U.S. and China (We Bank, GetPenta, Holvi, Ideabank and Kabbage) and will rapidly have a significant impact on traditional SME banking service providers.
It is becoming easier than ever before to find business financing as supply is gradually overtaking demand in a growing economy. Simplicity, speed and agility will become key for banking players in all areas - products, processes and customer relations. One of the fastest responses involves partnerships between banks and fintechs to pool their strengths and provide customers with additional services, beyond banking. Creating a network of such partnerships will enable banks to reach the ultimate business ecosystem status with beyond banking offerings, but this requires a new, augmented SME Banking strategy.
With the subtitle of SME Banking Revolution: Business Ecosystems, Beyond Banking Offerings, Augmented Strategy, the 2019 Efma SME Banking Summit will cover the following topics:
• Use of AI and machine learning in SME banking
• Non-financial, value-added services and freemium offers to boost loyalty and create new revenue streams
• Bank + Fintech partnership success stories
• Microfinancing, micro segment customers value proposition
• Supply finance chain programmes
• Reaching out to new customers from early stage start-ups: acquisition, retention and channels beyond banking
• Designing new products and new ways of credit scoring
• Subsegmentation and targeting - mobility, cashflow & payments, product bundling
• Cross-functional approach:
• SME business owners as premium banking individual customers
• cross-selling opportunities for insurance products: pension plans, insurance product offerings
• Global launch of Efma SME Banking Community Programme 2019/2020
Have a look on: www.efma.com/insurance19