Business financial management technology provider Strands has announced the findings of its 'SME Banking: Intelligence – Not Applied' study, which looked at over 200 SMEs and banks serving more than 1.3 million SMEs.

It revealed that 84% of SMEs wanted financial planning and business growth advice delivered digitally, but only 17% of banks currently offered digital financial management tools.

Just under half of SMEs (46%) felt their bank “understands their financial needs” well, rising to 91% for understanding their needs well or fairly well.

However, less than half of SMEs said they currently received financial planning functionality from their bank, and less than a quarter have access to budgeting and spending tools.

Meanwhile, only 34% of banks felt that financial planning and business advice was a key need.

The report found that 40% of SMEs cited “lack of personalisation” as a major reason to leave their current provider, while 43% were considering switching to a challenger bank.

“In a period of intense economic turbulence, the existing relationships between banks and SMEs are beginning to weaken,” said Erik Brieva, CEO of Strands.

“SMEs are crying out for personalised financial advice, delivered digitally to help them manage and grow their businesses in times of grave economic uncertainty.

“Incumbents are failing to meet these needs and are increasingly regarded as a utility; simply a provider of transactional services.”

Erik added that the situation was not insurmountable and that traditional banks had the relationships with SMEs and were still the providers of choice.

“…Traditional banks have the financial intelligence SMEs crave,” Erik concluded.

“Banks need to apply this intelligence – digitally, and in a personalised way – to become business partners, and in doing so retain and grow their SME market share.”