Small business owners, especially those in so-called Generation Z, are reportedly pushing changes to their nation’s banking sector, and not necessarily in the ways one might expect.
The growing demands of SMEs have led to the growth of the alternative lending sector in many nations, and recent research found that 72 percent of customers will go to a non-bank source to fulfill their financial needs if a traditional bank does not meet them.
Banks are entering a new era of offering innovative services to small businesses, according to a new report from The Financial, published Wednesday (May 27). These services can range from providing office spaces, translation services, staff training and other enterprise tools.
Alexey Sayapin, the Business Development Director at SME Banking Club, similarly sounded off on these modern modifications to traditional banking. The SME Banking Club held its SME Banking Conference last week to connect business representatives with banks. According to Sayapin, while SMEs are most often considered a market for micro lending among traditional banks, the rise in alternative SME finance players proves otherwise. “Currently,” he said, “consumers no longer solely expect lending from their banks. They require their banks to be their consultant, IT service deliverer and financial partner.”
But according to reports, the biggest driver behind the change in mainstream banks is the mobile device. The Generation Z segment of bankers are demanding modern approaches to their finances, and according to the Regional Manager at the European Financial Management Association, Lukas Dzuroska, it’s technology conglomerates like Google and Apple that are influencing the changing needs for SME bank customers.
Those in so-called Generation Connected, or Generation Z, have lived their entire lives with smartphone and mobile technology. “So, they would like to have an approach that is directly for them” when it comes to banking,” Dzuroska said. “Generation Z would like to have a similar approach in SME banking.”
It’s a tough task for mainstream banks, but according to International Finance Corporation Senior Banking Expert Ferdinand Tuinstra, “banking will not only need to invest in their SME programs, but also devise innovative products and take a different approach in order to win over the SME segment,” adding that doing so will boost economic growth and job creation.