Traditional banks are winning the battle for business banking accounts. But for how long?
In a recent Pega survey of 340 UK businesses who use credit and lending services, traditional banks continue to lead the way in terms of who organisations would choose if they were to switch providers. This is despite the rise of challenger banks like Tide, Starling and Revolut offering business banking services.
Yet, businesses are keen to switch and technology is making it easier. Two thirds of large organisations considered changing and nearly a quarter (22%) have changed their main bank in the last year. Over half of medium sized organisations are similarly placed for switching. The main reason for changing providers is high charges, plus a requirement for better online banking facilities and poor service.
When asked about what technology innovations they would like to see from a bank, businesses said they would like to see greater use of AI for more personalised, tailored and timely offers.
But transparency, the extent to which a corporation’s actions are visible to customers, was also a concern when British businesses select a bank. During the onboarding processes businesses said they would prioritise transparency, consistency and automation when choosing a new banking partner. They also want to see improved speed of service, confirmation texts/e-mails, and a greater understanding of customer needs to deliver the right products and services.
Commenting on the findings, Steve Morgan said, “The traditional larger banks might feel comfortable when they read our research. But that would be a mistake. Our study suggests business customers like the idea of improved use of technology and AI in their banking service. This is going to be a critical competitive comparison point for the future of business banking. Switching looks to be increasing in business banking and both the technology and options for clients are improving.
“Clients expect AI to be used to help identify needs better, so that more personalised products and services can be offered, and so banks can predict the client needs when they switch or take out a new product. This is the time to make a great impression.”