Revolut reveals reluctance amongst SMEs to abandon traditional banks

Revolut Business, a global business account that’s aimed at enhancing growth, speed, ease and security has revealed the findings for its 2020 vision study, analysing why SMEs remain loyal to ‘antiquated banking practices’.

Based on a survey of 602 UK, French and Polish SMEs, the report found that the businesses are sticking with traditional financial services providers despite new demands from digital-first businesses.

Vaidas Adomauskas, Head of Product at Revolut Business commented: “Most SMEs have stuck with longstanding, traditional business account relationships, but this is set to change.

“Today’s global SMEs are embracing accounting or collaboration solutions such as Xero and Slack, that make running a business easier. They’re looking for features that make running their business finances faster, more flexible, and more friendly toward global growth.

“Our research reveals that SMEs are expecting a similar business account service, they’re less reliant on cash and physical branches and more focused on user-friendly experiences across web and mobile. Naturally, the forty-two percent of SMEs looking to switch business account providers in the next twelve months will gravitate to those offering digital experiences that save both time and costs – leaving SMEs to focus on growing their business.”

Over half of SMEs now do some form of international business and a further 13% expect to start doing so soon. In 2008, 60% percent of all transactions were paid in cash. Fast forward to a decade later and payments come in a variety of different methods. 34% of SME customers are paying by bank transfer, 23% by cash, 23% by credit/debit card and 19% by other means. 

Despite this, almost a quarter of SMEs have refrained from switching business account provider since 2008. In total, 63% have had the same provider for more than five years. 

Just over a quarter of SMEs also stated they still visit a physical branch of their provider every day. Over half say they seldom or never call their provider and just under half seldom or never visit a branch. In contrast, 43% of SMEs use web / app interfaces to manage their business accounts daily and a further 30% do so weekly.

It comes as SMEs embark on what may be a turbulent period, as they look to remain stable throughout the COVID-19 global health pandemic.