Stuart Chalmers, senior manager in financial services at Accenture Scotland
There is little doubt that the banks have got the message that they need to change their approach to small and medium sized businesses.
While experience on the ground would suggest that there is a long way to go, the Scottish Government recently reported a rapid rise in the number of SMEs receiving the funding they were seeking.
So is there a shift beginning to take place but more importantly will it last?
In 2010, one in four SMEs that applied for bank finance received an outright rejection, compared to one in twenty five in 2007.
In the same year, Mintel asked a group of 292 small business owners whether they were satisfied with their bank.
Their survey revealed that 42 per cent were dissatisfied.
Our own research shows that many SMEs believed their banks were failing most in the dimensions of support and personal service.
So a turnaround in banks’ attitude to SMEs needs to be quite profound so that it not only has an impact but is also sustainable.
The attractions of the SME markets to banks are obvious.
SMEs account for 99.3 per cent of enterprises, 53.6 per cent of employment and 36.5 per cent of turnover in Scotland, representing a huge and under-exploited growth opportunity for the banks.
Their attractiveness is further underlined by their tendency to be fiercely loyal and ‘sticky’ customers that are historically not predisposed to ‘multi-banking’.
However, there is a new eco-system forming within financial services which is creating greater competition.
Regulatory change and the unbundling of products and services that were once the preserve of banks is encouraging new entrants into the market and giving SMEs greater choice and the purchasing power to demand services to suit.
The traditional banks that support the SME market, therefore, need to constantly justify their place at the table; while emerging players and non-bank financial institutions such as Funding Circle and Crowdcube, offer compelling alternative services.
Accenture believes that the result is that this puts SMEs in a strong position to demand more: more innovative financial services, sound and commercially aware advice - not just on products and services but around the wider business issues, as well as more tailored and responsive multi-channel banking.
This is the future, and it is already beginning to happen.
Banks are beginning to re-structure their relationships with SMEs through a more customer-centric approach. And based on better, more substantial working relationships, lending levels should rise again.
The net result will be a better deal all round for SME customers.
Stuart Chalmers is a senior manager in financial services at Accenture Scotland