SME’s look for a challenger bank to move their business

Research shows that 25% of SME owners are interested in switching to challenger bank accounts.

Smart Money People conducted a survey of 500 decision-makers from SMEs and found that more than half (51%) of them are considering changing their bank this year.

The results showed that 54% of these people are interested in moving to a bank with a challenging reputation, and 46% want to move to a bank with a more traditional bank. The survey revealed that 80% use the former.

They are easy to use and don’t have the same high operating costs as traditional banks. Because they have no branch and only a small workforce, these challenger banks are able to grow to become a part of the new fintech industry.

They are sometimes viewed as an additional spending account. Customers can bank through large banks while the digital bank is used for their everyday transactions. These accounts are often seen as banks that can be used by younger and more tech-savvy customers.

However, this is slowly changing. It was highlighted in last year’s Competition and Markets Authority (CMA), SME Business Banking Customer Satisfaction Ranking. Starling, a digital challenger bank, came first in customer satisfaction across three of the four categories it was placed in.

Jacqueline Dewey CEO, Smart Money People said that these banks have been able to draw consumers. Businesses could follow their lead. She said that “our research suggests that 2023 could be the year small businesses adopt this trend to move to what’s often a faster and more convenient bank solution.”

Dewey stated that lower fees (45% and 33% respectively) are the most important reasons to switch to a bank account for business. However, the survey found that SMEs also enjoy better online banking (33%), and customer service (29%).

As high-level investment continues to flow into the sector, there are more challengers. She said that in addition to the well-known fintechs and challenger banks, there are a growing number of newer providers who also aim to draw business customers.

Although the challengers gained some trust over the last decade, the neobanks remain a mystery to the small-business banking community.

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