No surprise: Britain’s SMEs are thinking more about fintechs, but aren’t quite convinced

51% would still turn to their bank first.

Nearly half of the UK’s small and medium-sized businesses, 49%, are poised to turn away from big traditional banks when it comes to choosing financial services.

Instead, awareness of peer-to-peer marketplaces and digital banks are on the rise, with 66% of SMEs being aware of other options available to them.

The figures, reported by marketplace lender Growth Street who surveyed 2,000 SMEs, paint a particularly positive picture for alternative lenders, which are now being considered by 35% of small businesses (up from 30% in 2018).

More disappointingly for the industry, 51% of directors and employees at SMEs said they would still approach their bank first when thinking about finance, a figure that had actually grown from 45% last year.

“It might be unrealistic to expect a seamless transition to a fintech-first mindset,” said Growth Street CEO Greg Carter.

“Nevertheless, our survey has exposed just how far many respondents see the banks as the first port of call. This is not necessarily welcome news for challenger brands.”

Luckily understanding and confidence in non-bank funding specifically are on the rise, last year 45% of businesses said they were “not at all confident” in their knowledge of non-bank funding, a figure that fell to 34% this year.

Still, as Carter mentions, hundreds of millions of RBS competition fund pounds are being distributed to challenger banking brands which might be the motivation many SMEs need to get clued-up and take the plunge.