Despite this, SMEs face an annual $5.2 trillion funding gap, according to The World Bank. This is 1.4 times more than the current level of global SME lending. So, how is the SME ecosystem evolving, and what does this mean for lending and financial services towards small businesses? Mambu surveyed over 1,000 SMEs globally to find out.

What the research shows is that the vast majority of SMEs (92%) are open to switching lenders if a competing lender offered something different or improved their offering. Among their top reasons: to gain access to better digital services.

For incumbents burdened by legacy platforms, adopting a digital approach is vital to staying competitive and servicing this important sector. It’s the reason why financial services providers like Recognise Bank, New10 and Lumi partnered with Mambu, using technology to speed up decisions and help their customers grow and reimagine their businesses.

We’ll dive into how and why lenders are adopting Mambu’s cloud banking platform to revamp their underlying tech stacks and launch loan products in minutes, not months.

The lack of attention paid to the needs of SMEs has created an opportunity for fintechs and non-traditional players, offering innovative solutions where previously there were none. However, even with these offerings from challengers, banks remain the most trusted financial institution for SMEs compared with technology companies.

But banks can’t afford to be complacent. Traditionally lengthy and time consuming, loan applications need to be brought into the 21st century. Mambu research found that the length of time it takes to apply for a loan is one of the most important considerations for SMEs when choosing a lender, with the vast majority (79%) saying they want faster loan decisioning from lenders.

When evaluating SME-focussed solutions, lenders can consider five essential questions that will allow them to best answer the SME industry’s requirements:

SMEs are continuously on the lookout for better ways to source funding and manage their money. If financial institutions and lenders want to keep existing customers and find new ones within this segment, they must meet these needs or fail behind.

When it comes to financing this sector, SMEs are often only offered one-size-fits-all solutions, which are either too small to be tailored or too big for their needs. The kind of lending these businesses actually require is financial support that allows them to finance their operations, invest in growth opportunities, and ultimately contribute to the overall prosperity of the economy.

Many new and established lenders have opted to run on Mambu’s platform, which supports a variety of use cases, including the ability to choose exactly what they need from our lending engine and to add connected services on top via our completely transparent APIs.

IRIS is a digital banking platform in Colombia that caters to SMEs. To increase its lending capacity to this vital segment, it needed to scale efficiently, and the only way to do just that is on the cloud. It chose Mambu, and became Colombia’s first purely digital e-bank to exclusively service the SMEs.

It’s user experiences like these that best ensure customer loyalty. Running on a modern cover ensures lenders can deliver competitive SME-centric portfolios that keep pace with evolving market needs. This approach unlocks flexibility, while reducing time-to-market for lenders today.

To seize the opportunity within the SME space, lenders need to offer more; they need to provide greater flexibility, more automation, faster decisioning and easier processing to help businesses grow. Financial institutions must recognise the unique needs of the SME sector and respond to them with flexible and hyper-relevant products and support.

This agility and customer-first approach is only possible when running on a modern core. While it feels like a huge undertaking at the outset, with the right partner, cloud-based offering and support, transformation is within reach, along with a brand new audience to serve.

Competition to service the SME sector is increasing all the time, and these niches that are left open are being filled by digital innovators, forcing other financial organisations to improve their technical capabilities and adopt a more flexible, tailored solution.

Mambu's cloud banking platform enables modern financial experiences. With its composable technology, hundreds of financial powerhouses and fintech disruptors around the world have shifted to a modern core to win the hearts of their SME customers every day.