// PREDICTIVE INTELLIGENCE //
HOW TRADITIONAL BANKS IN AUSTRALIA AND NEW ZEALAND CAN REGAIN LOST GROUND IN THE SME SPACE
When it comes to banking, SMEs’ needs are different to those of larger companies. Traditional banks do not always cater to these differences, which means SMEs look elsewhere. Jeremy Thomas, Regional Director at Backbase, explores how banks in Australia and New Zealand can win over the SME sector and rethink what small businesses need from them.
IGITAL DISRUPTORS HAVE
D eroded the market share of traditional banks, but by modernising their approach, major players in Australia and New Zealand can win back small and medium enterprises( SMEs) with seamless, customerfocused solutions.
Although small businesses are regularly referred to as the backbone of the Australian and New Zealand economies – they provide employment for approximately 6 million people – the sector has been underserved by the traditional banking sector, historically.
Many banks have geared their offerings towards large commercial and retail enterprises while smaller businesses have found it harder to obtain the facilities and funds needed to support their growth.
Cue an exodus to non-traditional and digital native financial services providers that haven’ t sought to make copious volumes of paperwork and slow access to money their hallmarks.
Rather, these newer comers have focused on creating a very different experience for SME customers, one that’ s centred around speed, ease of use and personalisation.
The flight to non-traditional lenders
And it’ s worked: 54 % of Australian SMEs would look to non-bank lenders to finance their investments in 2025, according to ScotPac’ s latest SME Growth Index report, released in October 2024. By contrast, just 35 % of SMEs planned to tap their main relationship bank, or one of its peers, down from 47 % the previous year.
“ The days of cumbersome, one-size-fits-all bank financing are gone, replaced by a growing demand for alternative options that are
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SME OWNERS AND OPERATORS HAVE BEEN MOTIVATED TO MOVE BEYOND TRADITIONAL FUNDING SOURCES, ESPECIALLY LENDING AGAINST THE FAMILY HOME, TO KEEP PACE WITH RISING COSTS AND UNCERTAIN DEMAND.
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