By Jonathan Quin
It is an age old adage that small businesses do not receive as good a service from banks as their larger counterparts. For many years, this was just part of doing business: large businesses will be prioritised by banks – often receiving the best rates or service, because their custom is worth more.
The tragedy is that such disparity in service could be holding SMEs back from achieving their full potential and benefitting the economy as a whole. When it comes to trading online, our recent research, conducted with the Centre for Economics & Business Research (Cebr), uncovered that 13% of UK SMEs – the equivalent of 700,000 nationally – cite mistrust of financial institutions as a major obstacle.
This mistrust is personified by the unfair treatment SMEs receive in comparison to bigger companies. For example, SMEs trading internationally are often held back by poor levels of customer support or lack of bespoke customer service. SMEs exporting goods online are also typically held back by expensive hidden charges.
However, a new wave of fintech enabled solutions are transforming the financial landscape for SMEs and helping to level the playing field, so the service they receive is more akin to that enjoyed by larger businesses.
This is especially apparent when it comes to international payments. At WorldFirst, we have developed the World Account – an international, multicurrency payments platform – that provides a range of international banking services that many SMEs trading overseas find impossible to access through traditional banks.
There is a massive opportunity available for SMEs if they can access products and services that make doing business easier. The Cebr research found that SMEs account for 9% of all UK eCommerce sales in 2015 – the equivalent of £53bn – up from 4% in 2009. In addition, the Cebr findings also identified a £106bn trading opportunity for the country by 2020, if more SMEs fulfil their full potential to export goods and services online around the world. This would effectively double their contribution to the economy through online sales alone in just five years.
However, this potential will not be fulfilled if UK SMEs are continually held back. The time is right for innovative solutions to come to the fore to solve age-old problems, such as multicurrency platforms, and fill the gaps in the market that traditional financial institutions are unable to cover.
Ultimately, these solutions will not only help SMEs realise their full potential, but will boost the international trading performance of the UK as a whole.
Jonathan Quin is co-founder and CEO of World First