A majority of bankers see great potential in the small-to-medium enterprise segment and have found a strong demand for new services for these customers, a new survey from Fundtech has found.
Ninety-five percent of bankers said potential in the SME area was equal to or greater than any other current opportunity while 57% described it as huge or large. A fifth of respondents said that the increased demand for new services from SME clients was "unprecedented" while 60% said that the demand for new services was more than usual, Fundtech said Monday.
Thirty-eight percent of respondents said that developing or expanding their mobile banking channel was their bank's top priority for the SME market. Reducing the cost of servicing this area was also important as 34% of participants said this was their top priority.
Concern regarding competition was also evident in the survey. Almost 60% of participants said that they were seeing some evidence of nonbank competitors taking away business from them in the SME segment.
"The SME market offers an enormous growth opportunity to banks that understand their unique needs," George Ravich, Fundtech chief marketing officer, said in a news release. "For the millions of SMEs that consider their pick-up trucks as their offices, the mobile channel provides a compelling level of convenience and control."
Regulation and compliance stood out as leading concerns among the bankers surveyed. The survey found that there was a continuing lack of clarity around what must be done to comply with new regulations such as the Dodd-Frank Act, and the expectation that there will be additional regulations. More than 30% said that they either were not sure what their department had to do in order to comply or had many questions. Almost half said they "mostly" understood what they need to do.
Fifty-six percent believed that Dodd-Frank will undergo major revisions in the coming years while 33% think that "this is just the beginning" and that there will be many more new regulations to come.
The survey included responses from 137 banking executives from more than 100 financial institutions. The live poll was conducted at Fundtech's annual North American Insights client conference in June.