IBM Study: Divergent Views Among Small to Medium Sized Business Leaders and the Banks that Serve Them Uncover a White Space for Nimble Financial Institutions to Compete in this Varied Market Segment
IBM's Institute for Business Value and the Banking Industry Architecture Network (BIAN) conducted a global survey revealing a significant disconnect between small to medium-sized enterprises (SMEs) and banks. The study, titled 'Banking for Small and Medium Enterprises: Serving the World Economy with Data and AI', highlights that banks may be missing opportunities to foster growth in the SME market due to their focus on risk reduction and regulatory compliance.
Key findings include:
- Less than 6% of bank executives graded their SME banking services with an 'A'
- SMEs prioritize understanding of their unique needs, while banks focus on apps and branch proximity
- 64% of bank executives recognize the value of technology architecture standards
The report recommends that financial institutions invest in ecosystem platforms, adopt enterprise-wide approaches to emerging technologies, and embrace AI and automation to enhance SME client offerings.
L'Istituto per il Valore Aziendale di IBM e la Banking Industry Architecture Network (BIAN) hanno condotto un'indagine globale che rivela un significativo disallineamento tra le piccole e medie imprese (PMI) e le banche. Lo studio, intitolato 'Bancario per Piccole e Medie Imprese: Servire l'Economia Mondiale con Dati e AI', evidenzia che le banche potrebbero perdere opportunità per favorire la crescita nel mercato delle PMI a causa della loro focalizzazione sulla riduzione del rischio e sulla conformità normativa.
I risultati chiave includono:
- Meno del 6% dei dirigenti bancari ha valutato i propri servizi per le PMI con una 'A'
- Le PMI danno priorità alla comprensione delle loro esigenze uniche, mentre le banche si concentrano su app e prossimità delle filiali
- Il 64% dei dirigenti bancari riconosce il valore degli standard di architettura tecnologica
Il rapporto raccomanda che le istituzioni finanziarie investano in piattaforme ecosistemiche, adottino approcci aziendali alle tecnologie emergenti e abbraccino l'IA e l'automazione per migliorare l'offerta ai clienti PMI.
El Instituto de Valor Empresarial de IBM y la Red de Arquitectura de la Industria Bancaria (BIAN) realizaron una encuesta global que revela una desconexión significativa entre las pequeñas y medianas empresas (PYMES) y los bancos. El estudio, titulado 'Banca para Pequeñas y Medianas Empresas: Sirviendo a la Economía Mundial con Datos y AI', destaca que los bancos pueden estar perdiendo oportunidades para fomentar el crecimiento en el mercado de las PYMES debido a su enfoque en la reducción de riesgos y el cumplimiento normativo.
Los hallazgos clave incluyen:
- Menos del 6% de los ejecutivos bancarios calificaron sus servicios para PYMES con una 'A'
- Las PYMES priorizan la comprensión de sus necesidades únicas, mientras que los bancos se centran en aplicaciones y la proximidad de las sucursales
- El 64% de los ejecutivos bancarios reconocen el valor de los estándares de arquitectura tecnológica
El informe recomienda que las instituciones financieras inviertan en plataformas de ecosistemas, adopten enfoques empresariales hacia las tecnologías emergentes y abracen la IA y la automatización para mejorar las ofertas a los clientes de PYMES.
IBM 비즈니스 가치 연구소와 은행 산업 아키텍처 네트워크(BIAN)가 실시한 글로벌 설문조사에서는 중소기업(SME)과 은행 간의 현저한 단절이 드러났습니다. '중소기업을 위한 뱅킹: 데이터와 AI로 세계 경제에 기여하기'라는 제목의 이 연구는 은행들이 위험 감소와 규제 준수에 집중하는 바람에 SME 시장에서 성장 기회를 놓치고 있을 수 있다고 강조합니다.
주요 발견 사항은 다음과 같습니다:
- 은행 임원 중 6% 미만이 SME 뱅킹 서비스를 'A' 등급으로 평가했습니다.
- SME는 그들의 고유한 니즈를 이해하는 것을 우선시하며, 은행은 애플리케이션과 지점 근접성에 집중합니다.
- 은행 임원의 64%가 기술 아키텍처 표준의 가치를 인식합니다.
이 보고서는 금융 기관이 생태계 플랫폼에 투자하고, 신기술에 대한 기업 전반의 접근 방식을 채택하며, SME 고객 서비스를 향상시키기 위해 AI 및 자동화를 수용할 것을 권장합니다.
L'Institut pour la valeur commerciale d'IBM et le Banking Industry Architecture Network (BIAN) ont mené une enquête mondiale révélant un écart significatif entre les petites et moyennes entreprises (PME) et les banques. L'étude, intitulée 'Banque pour les petites et moyennes entreprises : servir l'économie mondiale avec des données et de l'IA', souligne que les banques pourraient manquer des opportunités pour stimuler la croissance sur le marché des PME en raison de leur concentration sur la réduction des risques et la conformité réglementaire.
Les principaux résultats incluent :
- Moins de 6 % des dirigeants bancaires ont évalué leurs services bancaires pour les PME avec un 'A'
- Les PME accordent la priorité à la compréhension de leurs besoins uniques, tandis que les banques se concentrent sur les applications et la proximité des agences
- 64 % des dirigeants bancaires reconnaissent la valeur des normes d'architecture technologique
Le rapport recommande aux institutions financières d'investir dans des plateformes écologiques, d'adopter des approches à l'échelle de l'entreprise pour les technologies émergentes et d'intégrer l'IA et l'automatisation pour améliorer l'offre aux clients PME.
Das Institut für Unternehmenswert von IBM und das Banking Industry Architecture Network (BIAN) haben eine globale Umfrage durchgeführt, die eine signifikante Diskrepanz zwischen kleinen und mittleren Unternehmen (KMU) und Banken aufzeigt. Die Studie mit dem Titel 'Banking für kleine und mittlere Unternehmen: Die Weltwirtschaft mit Daten und KI bedienen' hebt hervor, dass Banken möglicherweise Gelegenheiten zur Förderung des Wachstums im KMU-Markt verpassen, da sie sich auf Risikominderung und regulatorische Compliance konzentrieren.
Die wichtigsten Erkenntnisse umfassen:
- Weniger als 6% der Bankvorstände bewerteten ihre Bankdienstleistungen für KMU mit einer 'A'
- KMU priorisieren das Verständnis ihrer einzigartigen Bedürfnisse, während Banken sich auf Apps und die Nähe ihrer Filialen konzentrieren
- 64% der Bankvorstände erkennen den Wert von Standards der Technologiearchitektur an
Der Bericht empfiehlt, dass Finanzinstitutionen in Ökosystemplattformen investieren, unternehmensweite Ansätze für neue Technologien annehmen und KI sowie Automatisierung einsetzen, um die Angebote für KMU-Kunden zu verbessern.
- IBM's study provides valuable insights for banks to improve their services for SMEs
- 64% of bank executives recognize the value of technology architecture standards for faster building and integration
- The report identifies opportunities for banks to better serve the SME market segment
- IBM offers solutions and expertise to help banks enhance their SME banking services
- Less than 6% of bank executives graded their SME banking services with an 'A'
- There's a significant disconnect between SMEs' needs and banks' service offerings
- Banks may be missing growth opportunities in the SME market due to focus on risk reduction and regulatory compliance
Insights
This study unveils a significant disconnect between SMEs and banks, presenting a golden opportunity for agile financial institutions. With SMEs contributing
The misalignment in priorities between SMEs and banks is striking. SMEs seek tailored solutions and networking opportunities, while banks focus on apps and branch proximity. This gap creates an opening for innovative financial products that truly address SME needs, potentially disrupting the market.
The emphasis on technology architecture standards by banks (64% citing faster building and cost reduction) suggests a shift towards more efficient, scalable solutions. This could lead to improved services and lower costs, benefiting both banks and SMEs in the long run.
The study highlights a critical role for emerging technologies in reshaping SME banking. Generative AI, automation and robust data strategies emerge as key enablers for banks to better serve this diverse client segment. The focus on a hybrid cloud strategy is particularly noteworthy, balancing the need for cost-effective cloud solutions with on-premises security for sensitive data.
The recommendation for an enterprise-wide approach to scaling technologies is crucial. This holistic strategy ensures that the benefits of AI and automation extend across all business lines, potentially leading to more comprehensive and innovative SME offerings.
The emphasis on ecosystem platforms and partners suggests a shift towards more collaborative, interconnected banking solutions. This could foster a more dynamic, growth-oriented environment for SMEs, potentially leading to new revenue streams and improved customer satisfaction for banks.
The global scope of this study, covering 9 countries for SMEs and 25 for banking executives, provides a comprehensive view of the SME banking landscape. The significant sample size (>1,000 SMEs and 700 banking executives) lends credibility to the findings.
The divergence in priorities between SMEs and banks is a key insight. SMEs prioritize compliance help and sustainability reporting, while banks focus on fraud monitoring and insurance. This misalignment presents an opportunity for banks to realign their services with actual SME needs, potentially increasing market share and customer loyalty.
The timing of the study (June-August 2024) ensures relevance to current market conditions. The involvement of the Banking Industry Architecture Network (BIAN) and SME Finance Forum adds further depth to the analysis, suggesting a collaborative approach to addressing industry challenges.
The Banking for Small and Medium Enterprises: Serving the World Economy with Data and AI report shares insights and analysis resulting from a global survey of SME business owners and managers with 50 or more employees, senior banking executives and fintech leaders.
Small to medium sized enterprises represent
"The disconnect between what small and midsized business leaders say they need in order to grow and the services most banks currently offer to this customer segment is profound," said Shanker Ramamurthy, Global Managing Partner Banking & Financial Markets, IBM Consulting. "The good news is that emerging technologies such as generative AI, in combination with automation and a robust data strategy, puts the potential for financial institutions to play a much more impactful role in the growth of this important client segment well within reach."
The ability to build, integrate and scale a technology environment flexible enough to meet the needs of a dynamic marketplace is paramount.
"While banks around the world increasingly rely on the cost effectiveness of cloud for their high-volume transactions, they retain their core functions and most sensitive data on premises," said John Duigenan, General Manager Global Financial Services Industry, IBM Technology. "A robust hybrid cloud strategy allows institutions to fully leverage the power of generative AI for informed insights into the behaviors of customers and their anticipated needs while ensuring the highest levels of privacy, security and resilience."
To better meet the needs of clients in all business domains, it is critical for financial services organizations to adopt a technology development methodology that enables organization-wide acceleration.
"As financial institutions grapple with how to best serve their various client segments, it's clear that a rational, standardized approach to technology architecture lays the groundwork for substantial efficiencies and future innovation," said Steve Van Wyk, Chairman, Banking Industry Architecture Network. "By adopting proven industry standards, banks lay the essential groundwork to improve their competitiveness."
Key Findings
- Less than
6% of bank executives surveyed graded the quality of their institutions SME banking services with an "A". Nearly half (47% ) gave themselves a "C". - SMEs expected an understanding of their unique business needs, tailored solutions and networking opportunities while banks prioritized apps, dedicated relationship managers and branch proximity.
- SMEs cited help with compliance and legal requirements and sustainability decisions and reporting as their two top needs while banks are prioritizing assistance with fraud monitoring in transactions and insurance for unforeseen events.
- Bank executives surveyed largely recognized the value of technology architecture standards with
64% citing the ability to build faster,64% noting a reduction in development and maintenance costs, and60% prizing the ability to integrate faster.
Recommendations
- Financial institutions should explore investments in ecosystem platforms and partners that will allow them to play a valuable role in creating opportunities for their SME clients to grow through digital innovation.
- An enterprise-wide approach to scaling emerging technologies, versus tactical applications, is the best practice strategy for optimizing the benefits of generative AI, automation and data and ensures that the advantages extend to all business lines and customer segments.
- Banks should embrace emerging technologies, such as generative AI and automation, to achieve greater efficiencies in compliance, risk and operations and redirect resources to enhance their SME client offerings.
For the full report, visit www.ibm.com/thought-leadership/institute-business-value/en-us/report/small-medium-enterprises-banking.
IBM is a leading provider of enterprise AI, hybrid cloud architecture, security and ESG insights to the global financial services sector. Its deep industry expertise, extensive portfolio of services and solutions, and its robust ecosystem of fintech partners, empower collaboration, innovation, and creation with clients. As a trusted partner to banks, insurers, capital markets and payments providers, IBM guides financial institutions on all stages of their digital transformation journeys through IBM Consulting and delivers the proven infrastructure, software, and services they need through IBM Technology. For more information, visit www.ibm.com/industries/banking-financial-markets.
Methodology
The IBM Institute for Business Value surveyed more than 1,000 SME owners and managers with 50 or more employees equally distributed across nine countries to explore their banking needs and how they are adapting to the progressive availability of digital services. Nearly 700 banking executives across 25 countries were surveyed to understand how their institutions are competing in SME banking. Additionally, one-on-one interviews were conducted with executives from financial institutions and fintechs to gain further insights. Data collection for the study occurred June through August 2024.
The IBM Institute for Business Value, IBM's thought leadership think tank, combines global research and performance data with expertise from industry thinkers and leading academics to deliver insights that make business leaders smarter. For more world-class thought leadership, visit www.ibm.com/ibv.
About IBM
IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. Thousands of governments and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.
1Financial Institutions Group (FIG) MSMEs. International Finance Corporation (IFC). https://www.ifc.org/content/dam/ifc/doc/2024/msme-s-factsheet-ifc-financial-institutions-group.pdf
Media Contact
Mary Ellen Higgins
IBM Global Financial Services Industry External Communications
maryellen.higgins@ibm.com
781.789.1911
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