Data is no longer a commodity. Across the financial services ecosystem it’s being used to acquire, retain, and grow customer relationships.

With a wealth of data, banks should be in an advantageous position. But with 80-85% of banking data remaining in the proof-of-concept phase of maturity, many are sitting on a gold mine of inaccessible or underutilised data.

This is opening the door for fintechs to increase market share with hyper personalised experiences, fuelled by customer data.

In a highly competitive space, maintaining customer relationships is critical for retention, growth, and ultimately profitability. But with fintechs also struggling to get it right, there’s still time for banks to get ahead. And strengthening relationships with SMBs could be the answer.

Helping SMBs compete with enterprise goliaths

Despite closure rates lowering, 52% of global SMBs still report lower sales as they grapple with the impacts of the global pandemic and a reduction in government support. Now more than ever, an SME’s goal is to survive rather than thrive.

The added pressure of competition from larger enterprises, that have powerful data analytics to fuel more personalised and targeted engagement with customers, deepens this position of survival.

The insights derived from payments data could be the changemaker for many SMBs, yet as many as 70% are yet to adopt data analytics. If banks can harness their data to help time and skill poor SMBs improve their business understanding and fuel better decision making, there’s opportunity to level the playing field between SMBs and larger institutions.

A win-win for banks

The benefits of doing this are not one sided. In the process of consolidating and cleaning data to generate powerful insights for SME customers, banks can build deeper, frictionless customer relationships.

Taking this a step further and augmenting data sets with third party data, can not only create a richer, more holistic view for SMBs, but helps banks power the next generation of value-added services, such as loyalty and offers, instant onboarding and service marketplaces.

The challenge is aligning pools of data, acting upon it quickly, and translating this data into intuitive and engaging experiences.

The power of partnerships

In most instances, partnership will be essential to do this at scale. An independent partner can bring the expertise and tech capabilities to ingest and consolidate multiple data sources compliantly. More importantly, the right partner can transform that data into experiences that are useful and engaging for the SME and can help banks secure more of the SME value chain.

But a mindset shift is required as banks need to embrace collaboration for this to work. And as fintechs such as Klarna scale at pace, building rich data streams in the process, timing is critical if banks are to retain competitive market share.