Europe’s retail banking sector has recently undergone a massive digital revolution. Whether online or mobile, financial institutions have been upgrading their systems to adapt to evolving user behaviour, especially in light of the global pandemic.
Nevertheless, retail banking has struggled with weak margins for years, not to mention the fierce competition and low customer acceptance of fees.
These challenges are ensuring that banks are increasingly focusing on business with SMEs. Innovative responses to the needs of small and medium-sized enterprises are currently and more than ever in demand in this area.
Sitting at 99%, SMEs not only account for the largest number of companies in Switzerland; they also contribute over 60% of the total value added and are responsible for 90% of the credit volume. While there’s a clear trend towards digital solutions in retail banking, the market for SMEs currently has virtually no options for this. Although they would be of great interest to this target group, traditional banks have only introduced new digital offerings for SMEs in a few isolated cases. After all, companies with up to 50 employees don’t often have a finance officer and therefore appreciate fast, efficient and transactional banking.
Financial institutions should listen carefully and take decisive action. It’s imperative that they act quickly because, just as in retail banking, there’s a real danger that ambitious newcomers will capture parts of the value chain in the SME sector. FinTechs and neobanks are on the verge of tackling areas such as loan products, customer relationships, means of payment while also becoming digital channels of traditional banking institutions and fighting for market share.
Current SME banking solutions still come with some pain points. For example, SME customers often struggle with manual processes and paperwork to manage their invoices, reconciliations and expenses. What’s more, they can often only access various banking information through multiple interfaces, lack an overall view of their liquidity, and have to put up with cumbersome data exchanges via accounting tools.
That’s why providers now have the challenging task of identifying the “jobs to be done” of SME customers and finding suitable solutions to meet these needs in a precise manner. In this context, priority is given to the more important issues, taking into account the current level of dissatisfaction with the various banking services and the areas that are underserved.
Multibanking offerings represent an especially attractive approach to solving this problem. As a matter of fact, more than half of all Swiss SMEs have more than two banking relationships. A multibanking solution offers them numerous benefits: they can merge all existing accounts from a wide range of financial institutions and manage them digitally in one central location.
In the future, customers will only interact with one bank rather than lots of different banks – the one that best meets their needs and offers an optimal user experience. Those who offer their SME customers a convincing multibanking proposition have the opportunity to position themselves as the main point of contact in the financial ecosystem.
The fact that multibanking is a central building block for the future of business customer relationships is on everyone’s mind today. However, this approach only becomes effective when it is implemented within the framework of a sophisticated Financial Cockpit with value-added services. Contovista’s Business Finance Manager (BFM), for example, offers a control center for business banking with a multibanking option. Banks can easily integrate it into their own system and offer it to business customers.
Customers benefit in two ways from this data-driven approach. On the one hand, the BFM offers powerful tools that are precisely tailored to SMEs. In the cockpit, they have their cash flow under control at all times and can utilise relevant features to ensure smart liquidity planning. Situation-specific warnings, recommendations and tips are automatically imported. The basis for this is the AI-driven evaluation of account information by the Contovista Enrichment Engine, whose algorithms ensure precise and automatic categorisation of transactions.
On the other hand, the advantages of the BFM are further enhanced by multibanking. This means that data from all accounts at other institutions can be viewed at any time. Of course, this information is also included in the BFM analytics, e.g. in liquidity planning, making it even more meaningful. Customers no longer have to go through the hassle of logging into other banks, but have a convenient digital one-stop shop for all their financial needs – including a user-friendly interface. The result? Measurable time savings that allow busy business people to focus even more on their real core competence – their business.
However, multibanking with the BFM also offers decisive advantages for financial institutions. They position themselves with SMEs as a digitally oriented, competent business partner that can offer tailored, customer-centric services. This way, they protect the customer interface from competitors while boosting customer loyalty. From a financial perspective, this is not only worthwhile because of the account fees; the expanded data basis also enables providers to cross-sell additional services (loans, partnerships, insurance etc.) in a targeted manner. Since they are presented in exactly the right way, their relevance for customers and their willingness to sign up increases.
Are you interested in a modern, multibanking solution based on a sophisticated Financial Cockpit? As partners, Capco and Contovista offer experience and know-how about solutions on both a professional and technical level. We would be happy to advise you and help you to offer tailor-made solutions for your customers’ needs with your multibanking Financial Cockpit and thereby strengthen key customer relationships.
