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UK SMEs are a growing and demanding segment accounting for approximately 99% of the private companies in the UK.
The future of
SME banking
Minds made for redefining
financial services
December 2018
The future of SME banking
1
When the financial services industry
works well, it creates growth, prosperity
and peace of mind for hundreds of
millions of people. No other industry
touches so many lives or shapes so
many futures.
At EY Financial Services, we share a
single focus to build a better financial
services industry, not just for now, but for
the future.
We train and nurture the inclusive teams
to develop minds that can transform,
shape and innovate financial services.
EY professionals come together from
different backgrounds and walks of life to
apply their skills and insights to ask better
questions. It's these better questions
that lead to better answers, benefitting
EY clients, their clients and the wider
community. Our minds are made to
build a better financial services industry.
It's how we play our part in building a
better working world.
ey.com/ukfs
Contents
Executive summary
1
What is the status quo?
2
Changes in the SME banking landscape
7
The evolving needs of the SME
11
The future: SME services in a platform world
17
The rise of technology firms
21
Closing the gap: how do you create a
future-proof SME bank?
23
The future of SME banking
Executive summary
We have identified dynamic changes in the industry, driven by evolving SME needs and
enabled by advances in technology.
Entrepreneurs come in all shapes and sizes, from the funky
FinTech start-up or family business on the high street to the
home-based manufacturer using 3D printers and the power of
the internet to reach new markets. The path from start-up to
corporate is no longer linear. The banking needs of small and
medium enterprises (SMEs) are changing dramatically, and the
banks' responses need to evolve accordingly. The UK Government
and regulators are applying increased scrutiny to the segment
to ensure that there is both innovation and competition in
the market.
There can be no doubt that increased access to