5 Digital Trends in SME Banking in 2022

Ondřej Slivka
time-icon4 minute read

As we at SME Banking Club discuss topics connected with the digitalization of SME banking on an everyday basis – during our webinars, publications on the websites, and interviews, in this article, I summarized the main subjects leading banks in the CEE region are thinking about right now.

It is worth saying that the digital maturity of the banks in the region is rising, we see more banks offering remote account openings for business customers, digital lending or factoring processes, and implementation of VAS in digital banking channels. And SME customers started to expect more and more from the banks.

Below are the top five things that can be defined as the most important and what benchmarks digital banking at the moment.

1. User experience within digital banking channels

The user experience within digital banking channels is becoming more important to customer satisfaction than the scope of implemented functionalities. First of all, almost all the banks (more than 70% of banks in the CEE region) implemented a core scope of functionality in their digital channels, such as access to business accounts, transfers in LCY, FCY, and FX exchange modules – so-called daily banking operations. When basic functionality is implemented, UX is becoming a competitive advantage and a decisive point for which bank to choose. New functions should be implemented with a focus on customer experience at once. Because if not, either a customer will choose another bank or will prefer non-digital channels (if available) because digital ones are not user-friendly and it’s faster and easier to use traditional channels.

2. Instant payments

If to continue the topic of daily banking operations, an important milestone in the real support of SMEs lies in implementing “real-time transactions”, when they reach the beneficiary’s account within a maximum of ten seconds from the initiation of the payment. 

Usually, the implementation of instant payments is pushed by regulations. Thus, banks in Hungary and Romania implemented such payments for business customers. Hope other countries in the region will follow soon.

3. Mobile Banking

The development of digital banking starts moving to mobile channels. We did notice several leading banks in the region announced that they put the development of mobile banking applications for business customers in the priority, creating a mobile-first customer experience and implementing VAS in mobile channels. As of now, the status quo in the CEE region looks like banks pay more attention to the development of online banking applications, and usually, mobile banking apps for business customers have half less functionality compared to online banking apps. Due to that, business customers tend to use online banking for business transactions. But during the last two years, the usage of mobile phones increased so significantly that mobile phones became our identity, and in the context of business customers, banks can not ignore it anymore. Of course, it requires new solutions for mobile security, and they appear on the market.

4. Embedded finance and Contextual finance

New ways of when and where banks should offer a loan to SMEs are needed. Contextual finance, in my opinion, should become a new must-have. A very personalized offer, in the context of the customer’s business and personal life, a real omnichannel seamless experience. Customers will benefit from such experiences. Additionally, platforms can unlock new use cases and often use customer data to improve financial access while reducing costs for their end customers. Payments and lending will continue to be the most popular embedded financial services and will be facilitated by value-added services, including insurance, e-invoicing, and accounting.

5. Integrations and interoperability

With the opening of banking interfaces for third parties, banks will have the opportunity not to be only data providers, but they can turn the implemented interface infrastructure imposed by regulation into opportunities to upgrade their internal processes and generate new revenue streams, opportunities for integration, and easier data exchange. It changes the way of thinking, it changes the traditional business model banks are operating right now. Banks are becoming multi-service platforms, ecosystems for their customers. And if earlier banks were focusing on the creation of closed ecosystems for their customers, now they should think about the creation of open ecosystems, interoperable ones. Customers are not interested in logging in to 10 platforms to get business done. It should be one login for the end user.

All these topics are included in the agenda of our upcoming CEE22 SME Banking Conference, and we will discuss them all together with the bankers from the CEE region. 

I invite you to join that discussion and therefore contribute to the development of SME banking on November 25 in Prague, in-person or online.

Looking forward to meeting you and discussing this with you.

Olena Gryniuk
CEE Director @ SME Banking Club