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SME Business Banking is emerging as the most exciting area of retail banking. It's not a surprise, as the gap between banks and SMEs is enormous: the potential is also enormous, because banks have rarely provided good services to SMEs. The feeling is mutual. Incredibly, research suggests that an SME that is turned down by a bank will never approach that bank again. Moneylenders, friends and family often must fill the gap that banks cannot cover.
Here are more amazing figures: More than 90 percent of the world's businesses are SMEs. In Europe, 90 percent of businesses have one to 10 employees. That figure is 50 percent in the US. We know that most businesses are started by one person, who builds a small team to run a hairdresser, a shop, a graphic design agency, or maybe a fintech!
Despite the fact that globally, there are 400 million small and medium businesses that employ most people around the world, SMEs are the equivalent of the unbanked masses in the world of consumer banking. They are often seen as low-margin and difficult clients. Research shows indeed that an SME that approaches a bank and is turned down is unlikely to ever approach another bank.
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