Small Business Banking Sector Market SWOT and PEST Analysis 2021-2031
The Small Business Banking Sector market is expected to register a CAGR of 7.2% during 2023–2031. Personalized offerings and embedded finance are likely to remain key trends in the market.
Small Business Banking Sector Market Analysis
Small business banking solutions cater to various needs and demands from small enterprise customers. It assists the institution financially to capitalize on opportunities to increase their income. SMEs play a crucial role in regions economic development, particularly in developing economies. They represent about 90% of businesses and more than 50% of employment worldwide. According to the World Bank, 600 million jobs will be required by 2030 to accommodate the rising global workforce, making SME growth a top priority for many governments around the world. This is driving the market for the small business banking sector.
Small Business Banking Sector Market Overview
Small businesses constitute a significant chunk of a bank’s revenue. In the current market scenario with tech development, there are limited barriers to the entry of startups and small businesses in the world. Banks offering small business finances and services are focusing on overhauling their operations and offering to support small businesses in their growth. This helps them capitalize on the current momentum to acquire new customers. According to Fiserv, on average, 10% of the bank’s accounts are constituted by small businesses. But they generate 35% of its revenue.
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Small Business Banking Sector Market: Strategic Insights
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Customize Research To Suit Your Requirement
We can optimize and tailor the analysis and scope which is unmet through our standard offerings. This flexibility will help you gain the exact information needed for your business planning and decision making.
Small Business Banking Sector Market: Strategic Insights
Naveen
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Naveen will walk you through a 15-minute call to present the report’s content and answer all queries if you have any.
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Small Business Banking Sector Market Drivers and Opportunities
Strengthening of the MSME Sector Globally to Favor Market
Small and medium-sized firms (SMEs) provide significant contributions to the global economy, including income, output, and employment, according to a report by National Action Plans on Business and Human Rights. The world's estimated 400 million SMEs serve as the backbone of economies. They are the primary source of job creation worldwide, accounting for more than 95% of enterprises and 60-70% of employment. SMEs create a significant percentage of new jobs in OECD nations and even more so in the EU, where they account for nearly 99% of all enterprises, 85% of new jobs, and two-thirds of total private sector employment. This motivated financial institutions across the world to develop and offer substantial lending and banking offers to the small business sector.
Digital Lending for Small Businesses
MSME digital lending is gradually increasing as internet lenders offer advantages to small firms. Online digital lending solutions for MSMEs are gaining appeal for a variety of reasons, including an easy loan application process, speedy loan approval and disbursement, and reduced credit history monitoring. Digital lending is becoming a popular funding alternative for MSMEs. The number of online money lending platforms and Neobanks is increasing as they seek to meet credit demand among MSMEs and individuals. Small businesses are drawn to digital financing options for a variety of reasons, including more relaxed approval criteria and shorter processing times.
Small Business Banking Sector Market Report Segmentation Analysis
Key segments that contributed to the derivation of the small business banking sector market analysis are service and end users.
- Based on service, the small business banking sector market is divided into working capital loans, merchant finance, long-term loans, unsecured loans, and others. The working capital loans segment held a larger market share in 2023.
- By end user, the market is segmented into agriculture, retail, manufacturing, construction, transportation, and others.
Small Business Banking Sector Market Share Analysis by Geography
The geographic scope of the small business banking sector market report is mainly divided into five regions: North America, Asia Pacific, Europe, Middle East & Africa, and South & Central America.
North America has dominated the market. According to the statistics shared by the Small Business Administration, 45 to 50% of US GDP is constituted by the SME sector. Established a strong financial sector for the growth of these SMEs, boosting the growth of the market in the region.
Small Business Banking Sector Market Report Scope
Small Business Banking Sector Market News and Recent Developments
The small business banking sector market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the small business banking sector market are listed below:
- Fiserv, Inc., a leading global provider of payments and financial services technology, is partnering with Genesis Bank, one of only two diverse multiracial Minority Depository Institutions (MDIs) in the country, to drive economic empowerment and create a positive impact in local communities. (Source: Fiserv, Newsletter, 2024)
- U.S. bank is doubling its team of Business Access Advisors in order to serve more cities. As a Business Access Advisor at U.S. Bank, Cassandra Kidd’s goal is to help underserved small businesses thrive by providing them access to information, connections, and other resources. (Source: U.S. Bank, Newsletter, 2024)
Small Business Banking Sector Market Report Coverage and Deliverables
The “Small Business Banking Sector Market Size and Forecast (2021–2031)” report provides a detailed analysis of the market covering below areas:
- Small business banking sector market size and forecast at global, regional, and country levels for all the key market segments covered under the scope
- Small business banking sector market trends as well as market dynamics such as drivers, restraints, and key opportunities
- Detailed PEST/Porter’s Five Forces and SWOT analysis
- Small business banking sector market analysis covering key market trends, global and regional framework, major players, regulations, and recent market developments
- Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the small business banking Sector market
- Detailed company profiles
Report Coverage
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
Segment Covered
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to segments covered.
Regional Scope
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
Country Scope
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to country scope.
Frequently Asked Questions
Some of the customization options available based on the request are additional 3–5 company profiles and country-specific analysis of 3–5 countries of your choice. Customizations are to be requested/discussed before making final order confirmation, as our team would review the same and check the feasibility.
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Fiserv, Bank of America, NBKC, Chase, Wise, Comerica, TD Bank, U.S. Bank, Capital One, First Citizens Bank, IndusInd Bank, Wells Fargo, Truist, Scotiabank, WaFd Bank, WSFS bank, Santander Bank, First Bank, Axos Bank, LendingClub, First Internet Bancorp and among the leading payers operating in the small business banking sector market.
Personalized offerings and embedded finance are likely to remain key trends in the market.
The small business banking sector market is expected to register a CAGR of 7.2% during 2023–2031.
The growing SME sector and rising technological advancements in the banking sector are expected to drive the small business banking sector market.
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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