1、Financial Services PracticeA digital approach to SME bankingSmall and medium-size enterprises are a clear growth opportunity for banks in a difficult environment.A digital-first approach with a personal touch can help banks crack the code of this historically overlooked segment.October 2022 Oatawa/G

2、etty Imagesby Mohcine Ouass and Nicolas ReuttnerYears of low interest rates,difficult consumer,corporate,and investment banking business conditions,and a tricky macroeconomic environment have squeezed many core areas of business for banks.In this context,previously overlooked segments are worth revi

3、siting.Small and medium-size enterprises(SMEs)in Europe represent one such opportunity for banks seeking to grow.European Central Bank(ECB)data highlight that for 20 percent of SMEs in Europe,access to financing is their most urgent problem.The same data shows that one in five SMEs is unable to acce

4、ss the credit it was planning to use.Despite the demand,the opportunity remains elusive for banks,which have struggled to serve SMEs successfully.The challenges from a banks perspective are many:smaller business clients demand a higher intensity of bank attention with limited returnsand a higher(per

5、ceived)cost of risk.Even quite small businesses can have complex and rapidly evolving needs,along with an unsteady risk profile;and yet,they often expect premium service.And there is no one-size-fits-all approach banks can apply to these clients,given the variety of needs,business types,and decision

6、 makers.Structurally,SMEs as a group fall between the cracks of retail and corporate banking,so from a banking perspective,there is often no natural organizational“home”for them as clients.SMEs also represent a broad range of business sizes:those at the micro end of the segment share similar dynamic