UK banks could generate £8.5bn in extra revenue by 2020 if they broaden their offerings for small and medium enterprises (SMEs), according to a new report.
Accenture's SME Banking 2020 report found there is currently a “significant perception gap” between small businesses and banks.
Banks are also facing “stiff competition” from fintech, and should be offering more “value-added products”, such as peer-to-peer lending, bitcoin and cloud services.
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Accenture found 58 per cent of 1,000 UK SMEs choose a bank based on lower cost and 56 per cent on overall service quality.
Four per cent currently choose on value-added services and the report suggested this should change.
It found there is a clear appetite among SMEs for these value-added services and this currently represents a missed opportunity.
The report suggested banks could be generating £1.6bn a year more in revenue from these services, representing potentially £8.5bn by 2020.
Gareth Wilson, Accenture banking practice lead for the UK and Ireland, said: “SMEs want banks to be more relevant and provide a wider range of business services.
"Banks need to recognise and seize this opportunity. Unless they do, SMEs may take their business elsewhere. Banks need to shift their mindset from ‘FS service provider’ to ‘SME service provider.’
"Through new technologies and new thinking, banks can capitalise on £8.5 billion of potential annual revenues. If they don’t they risk being disrupted out of a market that SMEs actively want them more involved in.”