This headline is based on a survey completed by Fraedom (recently acquired by Visa), which is a spend management solutions provider for corporates with roots in the Australia/New Zealand market. Prior to the Visa acquisition, the company was part of Hogg Robinson Group based in London. The survey respondents were UK based SMEs and did not seem generally enthusiastic about certain aspects of their banking relationships. This is not particulary surprising, and is similar in nature to other surveys we have seen over the years. Of course certain institutions would dispute these types of findings, especially those in the community banking (smaller) asset classes, who cater more to these types of businesses.
‘Fraedom said it highlighted that nearly a quarter of the survey sample (24%) believe banks ‘fail to prioritise SME needs’. In addition to this statistic, just 12% of respondents feel that banks fully deal with their business requirements. When SME respondents were asked what actions their banks could take to be most effective in strengthening their relationship with them, nearly half of respondents (46%), said: ‘simplify lending processes’. The next most popular option recorded was ‘be more proactive in offering advice and assistance while nearly a quarter of the sample (22%) referenced ‘provide a more personal ‘consumer-focused’ approach to engagement’.’
We recently released a report titled B2B Marketplaces: Disruption Presents Opportunity in which the lending gap for smaller businesses was discussed as an opportunity in the U.S. <$10 billion bank asset class market due to the relaxing of certain Dodd-Frank rules. This essentially touches upon that high quality liquid asset space that has to some extent hampered larger institutions from extending higher yield loans. The part about being more customer-focused (more or less a trusted partner) is always a high priority for small businesses since they cannot typically afford separate consultative servicies and have an expectation that banks will not just provide loans and/or cash management services but also understand the segment and help the business to grow.
Fraedom helps businesses with streamlining expense management with various automation capabilities, particulary delivered through organized cards programs, which has the effect of freeing up time, something that small businesses tend to appreciate.