1 in 10 Australian SMEs don’t want to interact with their bank

Elizabeth Barry 29 November 2016

small business owner online

New research confirms that businesses prefer to sort their banking online.

New research from banking analysts East & Partners has revealed one in 10 Australian small- to medium-sized enterprises (SMEs) don't want any interaction with their bank at all. The research involved interviews with 1,500 Australian firms with annual turnover of $1-20 million as part of the SME Transaction Banking Markets Program.

The research also showed that 96% of businesses surveyed confirmed that the Internet was their first preference for contact, which amounts to more than one in every three Australian SMEs.

East & Partners head of market analysis Martin Smith said the small business banking landscape in rapidly changing.

“As businesses and business owners become less tied down to their primary provider, whether it be via personal relationships, credit security or funding availability, they will seek out alternative account services and cash management providers based on price competiveness, ease of use, tailored products and technological features," he said.

E-banking was ranked at the equal first most important banking product category, and the research showed that Westpac and Commonwealth Bank are in the best position to take advantage of this.

Westpac leads the mind-share for e-banking services (34%), which is almost triple that of CommBank. However, Commonwealth Bank has more than doubled e-banking mind-share since 2009.

SMEs are increasingly seeing their primary banking relationship as being transaction-dominated, with the proportion of SMEs primarily interacting with their banks for credit needs falling below 50%. This percentage was as high as 69% in 2013.

"Banks need to act, and act fast," said Smith. "Smaller, more nimble firms, including non-Big Four, alternative finance providers and fintechs are quickly encroaching on the long under-valued small business market."

Latest business banking headlines

Image: Shutterstock

More great ideas from finder.com.au

Get a life insurance quote
Get a life insurance quote

Find out what it costs to protect yourself and your family

More info...
Refinancing home loans
Refinancing home loans

Choose from offers with rates as low as 3.39% p.a.

More info...
Google Pixel
Google Pixel

Compare plans for Google's flagship Android phone

More info...
Christmas ideas
Christmas ideas

Visit our Christmas homepage for gift ideas, markets, travel & deals

More info...

Ask a Question

You are about to post a question on finder.com.au

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Disclaimer: At finder.com.au we provide factual information and general advice. Before you make any decision about a product read the Product Disclosure Statement and consider your own circumstances to decide whether it is appropriate for you.
Rates and fees mentioned in comments are correct at the time of publication.
By submitting this question you agree to the finder.com.au privacy policy, receive follow up emails related to finder.com.au and to create a user account where further replies to your questions will be sent.

Ask a question
feedback