Understanding Gap: learning to think like an SME bank

Effective SME banking is a competitive advantage. John Mark Williams says how to think like an SME bank.


Effective SME banking is a competitive advantage. What is then the most important in the challenge to become an effective SME banker? During the 6th CEE SME Banking Club Conference that took place online on the 25th of November 2020, John Mark Williams, the CEO at The Institute of Leadership & Management, shared his observation in that matter.


Two things that cause the understanding gap between banks and SMEs are difference and distance.

John Mark Williams as an example gives the comparison between children and adults: „Children are not the small versions of adults, they are different from adults. In the same way, SMEs are not merely small versions of corporates, they are different in nature, and they need a different skills’ set and understating of how they work and what they do”.

Banks have already acquired a specific set of skills for a variety of their customers, for example, retail banking and corporate banking. But banks also need to have a specific set of skills for SME bankers and that can only come from understanding the SMEs’ needs.

The second cause is the distance both in terms of a psychical distance, for example, how many layers an SME opinion needs to go through before it reaches the bank policymaker, and also a virtual distance of the banks’ understanding, through collected data, and SMEs reality. The difference in mindset between the bank and the SME, and the distance between the bank and the opportunity to understand the SMS reality cause the understanding gap.


Aristotle once said: “The things we have to learn before we can do them, we learn by doing them.”

It requires SME bankers to experience the SMEs’ reality. If an SME banker does not have SME experience, then they should engage with SME and experience the reality of their life before that person can understand how SME works and functions and what skills as a banker it will need to bring. For example, a banker work shadowing an SME director or SME owner for some time just to get closer. Because it is not possible to learn the skills necessary to be an effective SME banker from a book.

Watch full interview with John Mark Williams during the CEE20 SME Banking Club Conference: