UK Businesses Call on Banks to Step Up Innovation, Offer Open Banking Services - Unisys Survey
With one in six small to medium-sized businesses ready to switch accounts, new research shows Open Banking, centralized banking apps and streamlined digital services are the key to encouraging competition in the market
LONDON and BLUE BELL, Pa., October 18, 2018 – A new study by Unisys Corporation (NYSE: UIS) exploring the attitudes of UK-based small to medium-sized businesses (SMB) about their banking providers reveals that, while business owners have high-levels of satisfaction with their financial institutions, many still express significant frustration with the banking technology offered, which inhibits them from accessing the banking services they require. Surveying over 450 SMB business owners in the UK, innovative banking services were cited as the biggest demand, highlighting an opportunity for banks to encourage SMBs to switch providers.
Key highlights from the survey include:
- 83 percent of SMBs use mobile banking, while almost all use online banking for their businesses.
- Trust was cited as the main reason for staying with current providers. Current innovation and digital services did not score as highly as expected as the reason why they selected their bank, suggesting that digital propositions need to be better developed.
- In addition to this, neither service standards or fees were key differentiators when SMBs considered business banking services, showing a lack of competition in the banking sector.
- While businesses said they find technology critical to their business, 39 percent of SMBs regularly experience technological problems that stop them access the banking services they require, with eight percent saying this happens 'every time.'
- 47 percent of SMBs would move to a challenger bank, digital bank or non-banking brand if they did decide to switch, more so than an established banking brand.
Technology and data are key to satisfied customers
When it comes to what would make SMBs switch, one in six SMBs surveyed said they are already looking to switch in the next 12 months, with the main incentives being if providers can better meet their needs. In fact, more than half would value an app that gave them access to all their banking facilities in one place, and more than one-third (37 percent) are comfortable with having little to no human interaction with their business banking interactions.
"SMBs are tech-savvy with, often, a higher uptake of online and mobile services than most consumers, and yet many experience technical difficulties regularly," commented Simon Healy, Industry Director for Unisys Financial Services, EMEA. "They see the use of technology by banks as critical to retention, but also in the development of new and innovative propositions that can enable their business."
The Open Banking revolution
Open Banking proved to have the potential to shake up the market and facilitate innovative new propositions SMBs are looking for. While awareness of Open Banking is high (87 percent had heard of Open Banking), understanding from SMBs is low – only 28 percent had a strong understanding, while one-third (33 percent) had either not heard of it or did not understand it. The sentiment towards Open Banking was found to be overwhelmingly positive, with SMBs that understood Open Banking being 3.6 times more likely to switch banks in the future to reap the benefits of tailored digital offerings.
"These reforms will force banks to shift from being one-stop-shops for financial services, to open platforms where customers can start to embrace a more modular approach to banking by giving verified third-parties direct access to this data," continued Healy. "In today's digital and customer-driven world, in which those who share data call the shots, it's adapt or die – and banks need to respond."
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