Small and medium businesses were hit hard by COVID-19. In August 2020, McKinsey reported that 70% of European SMEs saw their revenues decline as a result of the pandemic.
But it also supercharged SME growth. Research from our Disruption Diaries report on emerging consumer financial tribes identified Covidpreneurs as a key consumer group globally. Almost a quarter of consumers set up their own business since the pandemic, and a further 54% are now more likely to set up their own business.
However, the pandemic isn’t just responsible for creating more SMEs, it’s changing their expectations of lenders as access to funding remains a constant roadblock.
If this demand goes unaddressed, it is a huge missed opportunity for the global economy and SME banks and lenders. Financial institutions must do more to tackle challenging application processes for loans.
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The pandemic forced SMEs to reassess their business models to adapt quickly to the new situation, innovating their core business. The need for businesses to get fast clarity on their funding opportunities in its turn has stimulated banks to digitalise and provide fast and clear processes for loan applications.
Read the full report Small businesses, big growth. Additional commentary from Recognise Bank, New10, kompasbank, Salt Edge, nCino, IRIS, and Richard Lim, CEO of Retail Economics.
What's next?
The message from our research is clear: SMEs want better support and they’re not afraid to change lenders to find it. With 92% of SMEs open to switching globally, if a competitor offers a better service or something different, lenders can’t afford to be complacent.
Mambu's cloud banking platform enables modern financial experiences. With our composable technology, hundreds of financial powerhouses and fintech disruptors around the world have shifted to a high velocity operating model to win the hearts of their SME customers every day.