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