Seventy three per cent of UK SMEs have no contact with their bank relationship manager, according to a new study commissioned by BCSG. Eighty five per cent of them are using online/mobile banking on a monthly basis and 33 per cent on a weekly basis, whilst 28 per cent visit their branch once a week and 41 per cent no longer do so. The shift to digital services has increased the risk of these companies switching financial service provider, meaning banks must move towards a model that drives engagement through business critical insight and services to defend against SME churn. Forty nine per cent of those surveyed have been with their current bank for more than five years and 67 per cent would feel more engaged with their FI if they offered tools and advice to help with day-to-day business tasks, future planning and general efficiency.

The study, conducted in June and using primary data provided by RedShift Research, surveyed 250 UK managers with responsibility for banking at SMEs employing 250 people or less. “Banks are under enormous pressure to reduce costs whilst increasing their bottomline. The majority are adopting a digital-first approach as they pursue cost efficiencies and adapt to changing customer preferences. But this has had unintended consequences,” says John Davis, managing director at BCSG. “Banks are now acting as reactive customer service outlets, providing basic services when asked, rather than proactively providing the advice and guidance that their customers require. The result is that many SMEs are now shopping around for financial services. There is good news however. Banks are in a strong position given they have, effectively, a captive client base, with nearly half retaining the same bank for over five years. By utilising their digital infrastructure better to deliver guidance, insight and tools to their SME customers, forward-thinking banks can combat churn, cement a highly valuable stream of revenue and move from a basic transaction provider to a trusted business partner."

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