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Financial Services

How Australian banks can navigate satisfaction and loyalty in an undifferentiated SME banking market

SMEs expect improved digital services and a more supportive banking experience

Tales Sian Lopes
Tales Sian Lopes

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Small to Medium Enterprises (SMEs) in Australia are in need of differentiated and customer-centric digital experiences while banking. Despite representing a third of GDP and almost 98% of all Australian businesses, most Australian banks’ service for SMEs is little more than a rebadged retail offering, rather than compelling, data-driven SME solutions. The Business Banking Pulse Report 2024 by Publicis Sapient, which surveyed over 2,000 financial decision-makers at Australian SMEs, found that there is a real opportunity for banks to differentiate their experiences and grow their market share. It shows that Australian SMEs are willing to embrace new products and services, if banks are willing to go the extra mile to provide what they need.

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Improving customer satisfaction – a top priority

Enhanced focus on digital services and security is essential

Improved customer satisfaction is closely linked with ease of service. Amidst rapid digitalisation, banks are under increasing pressure to offer a more convenient, secure and supportive experience. For example, more than half (60%) of cyber-attack victims found their bank to be less than completely helpful in the aftermath of a breach. Banks need to overcome this hurdle and offer tangible services so that customers see real value in digital services.

Overcoming apathy

Australian banks can assume a leadership position by ensuring that SME customers are not just nominally satisfied but fully content with their services. To do this, they will need to plug gaps in service delivery, as nearly half (41%) of survey respondents said they perceived no improvements in their relationship with their bank since the Royal Commission. With 10,000 more SMEs set to be covered by the expanded definition in the 2025 Banking Code, it is critical for banks to overcome customer apathy and provide the right solutions for SMEs, especially in the wake of rising competition from existing banks and new market entrants.

With many banks revisiting their growth strategies and putting more emphasis on areas where they may be able to expand, the SME market is becoming increasingly important. By putting the customer at the heart of the digital experience and differentiating their offerings to SMEs, banks may be able to build new and more predictable revenue streams.

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