For years, banks and aspiring entrepreneurs have been at odds
Banks see SMEs as high-risk, low-reward customers, treating each SME as one of many — rather than an individual with high potential — and largely disregarding their emotions and aspirations as entrepreneurs.
Wait.... What's an SME?
SME banking covers financial products and services offered to small and medium-sized enterprises or businesses. It also often referred to as business banking. The definition of an SME, or a business banking customer, varies between countries, but can be based on the size of the labour force and/or financial variables, such as turnover and/or assets.
"The banks? We'll go to the banks when we're big enough for them to take us seriously."
—CEO & Co-Founder, VC-backed startup, UK
This perspective leads to a missed opportunity for banks; an untapped well of potential that comes from understanding the human behind the business. Banks can—and should—strive to play a meaningful role in SMEs’ success and sense of security, empowering them with the right information and tools, at the right time, and tailoring solutions to their needs across their journeys as business owners. When banks work toward building fruitful, long-term relationships with SMEs, trust, predictability, and security are cultivated and risk is minimized.
Relationship-building doesn’t happen overnight. Banks will need to make strategic efforts over time, throughout the entrepreneurs’ journey. Here, we’ll explore ways that banks can start to better support SMEs across multiple touchpoints, all through the lens of a business owner’s journey from idea to enterprise.
"Back in the day, I used to actually get bank managers and bank account representatives to come to my studio, check out my business, and be interested in what I actually do instead of treating me like any other customer. I went to them for some help and they cared, and that made me stay with them. If they want loyalty from me, they can’t just treat me like a number."
— Photography Founder, Canada, Temenos SME Think Space Innovation Series