Businesses in the UK are frustrated with the banking technology on offer according to a new study by Unisys Corporation.

The study found that while UK-based SME owners have high-levels of satisfaction with their financial institutions, many still express significant frustration with the banking technology offered. This is stopping them from accessing the banking services they require.

Surveying over 450 SME owners in the UK, innovative banking services were cited as the biggest demand, highlighting an opportunity for banks to encourage SMEs to switch providers.

Open Banking - the permitted sharing of customer financial information between services to drive competition - could be the key to shaking up the market and facilitating innovative new propositions.

While awareness of Open Banking is high (87 per cent had heard of it), understanding from SMEs is low – only 28 per cent had a strong understanding - while a third had either not heard of it or did not understand it.

However, the sentiment towards Open Banking was found to be overwhelmingly positive, with the SMEs that understood it being over three times more likely to switch banks in the future to reap the benefits of tailored digital offerings.

“These reforms will force banks to shift from being one-stop-shops for financial services to open platforms where customers can start to embrace a more modular approach to banking by giving verified third-parties direct access to this data,” said Unisys Financial Services, EMEA industry director Simon Healy.

“In today’s digital and customer-driven world, in which those who share data call the shots, it’s adapt or die – and banks need to respond.”

The study found that overall 83 per cent of SMEs use mobile banking, while almost all use online banking for their businesses.

Trust was cited as the main reason for staying with current providers. Current innovation and digital FinTech services did not score as highly as expected as the reason why they selected their bank, suggesting that digital propositions need to be better developed.

In addition to this, neither service standards nor fees were key differentiators when SMEs considered business banking services, showing a lack of competition in the banking sector.

Whilst businesses said they find technology critical to their business, 39 per cent of SMEs regularly experience technological problems that stop them access the banking services they require, with eight per cent saying this happens ‘every time’.

The study found that nearly half of SMEs would move to a challenger bank, digital bank or non-banking brand if they did decide to switch, more so than an established banking brand.

When it comes to what would make them switch, one in six SMEs surveyed said they are already looking to switch in the next 12 months, with the main incentives being if providers can better meet their needs.

More than half would value an app that gave them access to all their banking facilities in one place, and more than a third are comfortable with having little to no human interaction with their business banking interactions.

“SMEs are tech-savvy with, often, a higher uptake of online and mobile services than most consumers, and yet many experience technical difficulties regularly,” continued Healy.

“They see the use of technology by banks as critical to retention, but also in the development of new and innovative propositions that can enable their business.”