Bologna (Italy), June 24, 2021

Italian SME Business Longevity: for a new DNA of the relationship with small and medium-sized enterprises

The results of a CRIF-Nomisma study highlights the relationship between SMEs and credit institutions and the insurance world, as well as a propensity to use digital solutions and an attention to sustainability and ESG issues.

Considering the movement towards digital acceleration in response to the ongoing pandemic situation, the integration between digital tools and manual activities points towards a rich potential area for business development. In this scenario, the new role of credit institutions is also interesting, as pure banking services providers a partner in the supply of specialized services with high added value.

This is what emerges from the "SME Business Longevity" research promoted by CRIF and conducted by Nomisma, which has made it possible to appreciate the diversity of Italian SME profiles, from the relationship with specialist suppliers to that with the credit institutions with which one usually lives. The analysis took into consideration the evolution of risk in a post-Lockdown environment and the relationship with 360 ° sustainability and ESG (Environmental, Social and Governance factors).

The perimeter of the research 

By involving a representative group of SMEs transversal to sectors (agriculture, manufacturing, construction, trade, transport, services, rental activities), the research was developed with the aim of identifying the digital needs of companies, in the field of specialist services, with particular attention to banking and insurance services, based on 4 guidelines:

  • Business-bank relationship
  • Business and digital tools
  • Post Covid-19 business and insurance
  • Business and sustainability

Business-bank relationship

Over the past 6-12 months, 39% of companies have activated suppliers for business development. At the same time, only 23% of companies have promoted export consultancy services, as well as consultancy services for the evaluation and management of the supplier portfolio. This refers to specialized suppliers not belonging to the class of credit institutions.

With a view to the evolution of the role of credit institutions, the role of the latter in the perception of businesses is particularly interesting, 80% of Italian SMEs positively evaluate the bank with which they usually operate as a possible supplier of specialized services business, to internationalization, also considering the support services to access subsidized and sustainable finance - a share that rises to 84%for companies with a turnover between 5 and 25 million. The main benefit in half of the cases is to the ability to use integrated services.

Using this logic, the bank is configured as a valuable partner for multiple services, including: support for selection / participation in public tenders on subsidized finance (in 36% of cases), information services / consultancy for commercial development / growth of business (27%), cybersecurity solutions (17%), digital signature (17%), marketing and commercial campaign services (16%), consultancy for the assessment and management of the supplier portfolio (16%).

Business and digital tools

The research investigated the current state of the art and the relationship of SMEs with digital tools, in particular regarding the performance of certain operations, such as the control of balances and movements of company current accounts, the management and reconciliation of collections / invoices, the tracking of payments and account debits over a certain amount (4 out of 10 SMEs do not use any tracking tools) and the control of the dissemination of company information, such as passwords or e-mails on the dark web (6 out of 10 do not monitor the dissemination of such information).

A hybrid picture has emerged, in which digital tools (50% use ERP - Enterprise resource planning or "enterprise resource planning" - for the control of balances and account movements) are flanked by manual activities for 40% of some finance-treasury activities (reconciliation of receipts and invoices), a share that rises to 47% for companies with a turnover of up to 2 million euros.

The integration between these two modes appears high or medium-high for 40% of companies, but there is no integration for 26%.

It is through this data that the clear need to support the digitization of tools now manned manually or partially in digital mode emerges: tools now manual for business development and support in identifying potential customers (5.5 SMEs out of 10), and the search for subsidized loans (4.4 out of 10).

Business and post - COVID insurance 19

Italian SMEs are characterized by a level of under-insurance, so that today only 62% have insurance coverage in progress. Post Covid-19 risk exposure has increased for 69% of companies, in particular in the South and in the Islands (76% of SMEs) and for companies with a turnover between 2 and 5 Million (increased to 63% versus 56%).

In the face of  greater risk, insurance consultancy assumes a more significant strategic importance for the next 12 months, in particular with regards to the civil liability of directors (39%), professional and extra accidents (39%), third party liability (37 %), business interruption (33%) and cyber risk (32%).

Business and sustainability

Promotion is extremely important to develop awareness of sustainability, so much so that 39% of all SMEs have heard of ESG and sustainable finance (rising to 47% if company turnover exceeds 5 million euros). What exactly are their needs? 443% consider it important to receive a corporate sustainability certification (rising to 52% if company turnover exceeds 5 million euros.). Furthermore, sustainability plays a central role for 63% of companies. Evaluation is considered essential for 74% of Italian SMEs to increase their brand reputation and for half, to also reduce risks also thanks to '' access to concessions”.

Silvia Zucconi, Nomisma's Head of Market Intelligence and Business Information notes that : "The shock due to the pandemic situation led consumers first and then companies to take a leap forward, an acceleration of digital attitude, a real Copernican revolution. One figure above all: in 2020, 36% of Italian SMEs introduced at least one digital innovation in business processes. The widespread adoption of digital process innovations (e-commerce, administration, business development) thus represents the real challenge for Italian SMEs - also thanks to the large package of resources made available by the PNRR. Equipment available due to the clear role that digitization has today for business competition, given the direct correlation with performance".

by Elena Mazzotti, Head of client innovation & strategy of CRIF,  concludes by declaring that: "Digitization and sustainability are the two key trends that are already designing new market scenarios and will characterize the relationship with businesses in the coming years . This is also confirmed by the numbers of the National Recovery and Resilience Plan (PNRR): 22% and 30% the minimum share to be allocated respectively to digital transformation and ecological transition. The two themes, strongly interconnected, contribute to creating a virtuous and innovative path towards what CRIF calls 'SME business longevity', that is, the support to companies that is prolonged over time thanks to the construction of ecosystems of integrated services and personalized customer journeys, able to respond in real time to their changing needs, post COVID-19 scenario. It is therefore necessary to rewrite the paradigm of the relationship between companies and financial operators in the light of the radical transformations endogenous to the economic fabric and exogenous, connected to the new competitive scenario that sees the presence of new players and challengers on the market ".