Australia-based banking challenger Judo Bank has released an SME Banking Insights report for February 2021.
The extensive report notes that the Australian small to medium-sized enterprises (SME) segment remains the “largest battleground for revenue, profit and growth.” The report adds that this particular segment is now “firmly on the radar of all banks, non-bank lenders, and financial service providers.”
The report released by the challenger bank also mentions that to support these developments, the East & Partners have prepared a “customer-centric, demand side” research and insights program with assistance from Judo Bank. It aims to cover Australian SME firms and effective ways to work with them. The report adds that SMEs remain focused “on cash flow and working capital; this is what small businesses devote most of their resources upon and represents the single biggest business risk for them.”
The research report points out that the main goal of an SME is “actually being in business to create wealth in terms of shareholder and owner wealth, business growth and profitability.”
According to Judo Bank, it’s one of the “greatest supporters” of smaller businesses and is “actively seeking to uncover and address what are the most profound issues facing SMEs amid the devastating COVID-19 pandemic and beyond.”
While commenting on the SME financing gap, the report reveals:
“Just under one in two enterprises sought funding in the last 12 months (45.4 percent) for an average sum of A$1.2 million. SME finance applications fell in a broad range from A$300,000 – A$4.4 million, marking a significant increase on last round’s range of A$200,000 – A$2.6 million.”
The report further notes that to speed up the COVID-related recovery process, the top three factors SMEs need their Bank to deliver are as follows: a “more intimate understanding of their business operations and expertise (48.4 percent), their unique industry sector vertical characteristics (37.5 percent) and more streamlined compliance, know your customer (KYC) and documentation requirements (35.3 percent).”
Judo Bank also shares that general business banking advice will “not suffice given the scale and scope of the COVID impact to businesses bottom line and future growth prospects.”
The bank also points out that specific advice “relevant to their own business, and their sector, are needed urgently alongside simplified onboarding and documentation requirements.”
The report adds:
“With digitization of document heavy processes jumping ahead in line with the push online to cope with COVID restrictions, it is clear customer expectations of seamless loan processing and refinancing have increased significantly.”
