Post-pandemic Digital Banking for SMEs

The statistics about the expected survival rates of SMEs post the COVID-19 pandemic are worrying. Mass lockdowns and full closures of a huge amount of businesses for the majority of 2020 have put massive strains and pressures on the SME sector, who are the backbone of all major economies, accounting for 90% of businesses and 50% of employment worldwide.

A market that has traditionally been underserved by their banks, the need for improved services and support is more urgent now than ever before.


What can banks do to support SMEs through the pandemic and into the future?


  1. Acceleration of Digital
  2. Emergency Planning and Forecasting
  3. Education on Financial Support
  4. Simpler Access to Credit


  1. Acceleration of digital
  2. True for both SME and retail serving banks, the move towards digital banking solutions has been propelled forward in response to the COVID-19 situation. With temporary branch closures and inability to access finance in the traditional way, more people are moving online to manage their finances, with some apps reporting a 20% increase in monthly active users.

    In the US, there has been a 35% increase in the average time spent on a banking app compared to the previous year, and in Japan and South Korea this figure moves dramatically upwards to 85%. What’s more with face-to-face interactions at an all time low, customers need to be able to transfer money in a simple and contactless way, so online payment options are key for post-pandemic business.

    To serve SME customers effectively, banks need to ensure that their digital channels are up to date, simple to use and engaging for their customers. Simple dashboards with an overview of financial standing and breakdown of expenditure by category can be an introductory tool for SMEs to keep on top of their finances.


  3. Emergency planning and forecasting
  4. For SMEs financial planning and forecasting can be difficult, with a global crisis in play this has become near impossible. Declines in sales, cashflow issues and supply chain disruption are key concerns for SMEs in these challenging times, and banks need to find innovative digital solutions to support them through it.

    By providing cashflow forecasting and emergency funds planning tools, SMEs can keep on top of their upcoming expenses and foresee before the event, if they need to look for financial supports such as loans, overdrafts or in more worrying scenarios closures and redundancies.


  5. Education on Financial Supports
  6. Governments around the globe are all too aware of the implications of SME closures at scale. To avoid this, national initiatives have been launched to support the SME sector. In the UK they have launched a series of lending facilities named the Bounce Back Lending Scheme and in Singapore with support from the Monetary Authority of Singapore (MAS), Banks are lending to SMEs at near-zero interest rates.

    Through their digital channels, banks can take a leading role in the education around what financial supports are available to SMEs and aid governments with the distribution of these loans to eligible businesses.


  7. Simpler Access to credit
  8. Access to finance has traditionally been a slow and arduous process for both banks and SMEs. The urgent need for credit in times of crisis has turned this on its head and turnaround times for lending are quicker than they have ever been before.

    Maintaining efficiency in delivering credit to businesses that need it and are eligible for it should be a priority for banks post-pandemic. Digital tools and application processes are key to accelerating the time it takes to apply and be approved for finance.

In comparison to the economic downturn of 2008/2009, SMEs trust their banks to help them through these challenging times and it is an opportunity for banks to step into the role of champion for the SME industry. Continued acceleration of digital supports and tools, easier access to finance and education and support around government-run initiatives will be a huge asset to the SME community while also driving engagement and loyalty for banks.

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