The survey of 2,250 UK SMEs found that while 70% of SMEs report overall satisfaction with their main bank, half are dissatisfied with the level of proactive advice provided. This is also one of the top reasons why nearly one third (29%) of SMEs are open to switching their primary bank to another provider in the next year, alongside a desire for the provider to have more knowledge of their business, better branch access, competitive pricing, and improved digital banking. 

Half of SMEs now use fintechs for their business banking needs, up from a third five years ago, suggesting that fintechs are increasingly attractive by their competitive fee offers, seamless application processes and higher quality digital banking.

SMEs increasingly believe that loyalty should be better recognised, with rewards such as discounts and cashback ranking ahead of interest rates as reasons to switch card providers. 

Rewards are also the biggest drivers of satisfaction, alongside customer service and digital capabilities.

Mobile-first SMEs demand personalised apps

Mobile banking apps have rapidly become the go-to channel for SMEs, with more than half using them weekly, up from one in three in 2019. However, businesses today expect more from their digital experiences and are looking for personalised features that help solve their specific business needs.

The top three personalisation features desired by SMEs are:

1. Tailored product recommendations and applications provided as part of their digital banking platform
2. Personalised insights and recommendations based on the business’ cashflow position, lifecycle, or industry
3. A customised mobile banking app designed around business needs

Jonathan Ruston, Global Insights Director at RFI Global, said: “Our research shows that SMEs want a more consultative and personalised service from their banking provider and are increasingly willing to switch. It is essential that banks and other financial providers keep pace with business expectations and work harder to improve customer service with personalised mobile banking solutions. The winning business banks will be those that support SMEs throughout their growth journey.”

Optimism for growth but funding hurdles remain

Despite cost pressures, SMEs remain ambitious. A third (32%) cite rising operational costs as their biggest challenge, followed by the struggle to boost sales revenue (29%). Yet growth is still a key target for half of UK SMEs with one in four planning to grow domestic trade and one in four with plans to expand into new markets or grow their overseas sales within the next 12 months. France, Germany, and Canada are the most popular expansion targets. 

Demand for growth finance is also rising: one in four businesses are seeking funding, up from one in five on average over the past five years.

But access remains a major roadblock – two in every three SMEs encounter difficulties in securing funding. Female-led and ethnic minority founders are disproportionately affected; 70% of females report facing a challenge when applying for lending, compared to 60% for male counterparts. This rises to 90% for ethnic minority businesses.

Ruston continued: “Given the current economic climate, SMEs are surprisingly optimistic about growth, but access to funding is holding them back. If we want to unlock British growth ambitions, banks and financial providers must step up with competitive, accessible, tailored support packages.”

Other notable research highlights include:

• Real-time payments visibility is the most wanted digital improvement for UK merchants (31%)
• Choosing the right platform to operate an online store is the key challenge for merchants selling online (27%), with the need to accept new payment options a top two driver of switching ecommerce provider (25%)
• Trust in AI is rising. Over half of merchants (53%) see AI as a benefit compared with 35% in 2023. Those with no concerns about AI have almost tripled in 18 months (10% vs 26%)

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