The role of small and medium-sized enterprises (SMEs) in the UK economy is tremendous. In fact, 99 percent of businesses in the UK qualify as SMEs and bring in approximately £200 billion a year for the UK economy. Understandably, financial providers want to take advantage of the significant potential of SMEs in the UK.
However, encouraging SMEs to switch accounts and attracting new business accounts has always been one of the biggest conundrums for financial institutions, and as the previous Managing Director at a challenger bank I understand this pressure all too well. Many UK financial institutions outside ‘The Big Four’ are looking for a solution to the switching inertia, and competition is fierce with large banks such as RBS and Barclays maintaining control of the lions’ share of the market. Smaller and emerging providers tend to be limited, both in their scope of services and in their ability to respond to rising customer expectations.
This state of affairs is now poised for change with the advent of the Capability and Innovation Fund. The fund, comprised of £700 million, is designed to “encourage eligible bodies to develop and improve their capability to compete in the provision of banking services to SMEs.”
So how can banks reap the greatest value from the Capability and Innovation Fund? Unisys has investigated SME’s attitudes to their banks and the services they provide to uncover insights into their decision-making process, and what banks need to do to attract this customer base and develop new, innovative propositions.
With 1 in 6 SMEs ready to switch in the next 12 months and a preference for switching to challenger or non-bank brands, there is a significant opportunity for new providers to disrupt the current state of affairs in the SME sector. Read our report here, and discover how you can realise the full potential of the Capability and Innovation Fund and overcome the SME switching challenge.