Exploring the SME Opportunity: Applying the CX Growth Index to Business Banking in Australia

Introduction

Small and medium enterprises (SMEs) are the backbone of the Australian economy, representing a diverse and dynamic segment with unique banking needs. Yet, recent research reveals a striking uniformity in how Australian banks serve their SME customers. Most banks offer broadly similar products and services, leading to a market where satisfaction is high but true loyalty and differentiation are lacking. In this context, the Customer Experience Growth Index (CXGX) offers a powerful new lens for banks to understand, measure, and transform the SME business banking experience—unlocking growth and competitive advantage.

The State of SME Business Banking in Australia

Australian SMEs report high levels of satisfaction with their banks—95% are nominally satisfied—but this is not necessarily a reflection of exceptional service. Instead, it points to a market where inertia and lack of differentiation prevail. Forty percent of SMEs perceive no improvement in their banking relationship since the Royal Commission, and 41% see no reason to switch banks. Trustworthiness, service quality, and convenience are the top drivers of positive opinion, while technology and innovation rank lower in importance for most SMEs. This creates both a challenge and an opportunity: banks that can deliver a more compelling, secure, and supportive experience stand to become the primary destination for SME switchers, especially in moments of disruption or dissatisfaction.

Digital and Physical Channel Preferences: Nuanced, Not Binary

While digital transformation is reshaping business banking, the SME segment demonstrates nuanced preferences for digital and physical channels. The majority of SMEs—ranging from sole traders to medium businesses—prefer digital channels for most interactions (74–88% prefer only or mostly digital). However, physical branches remain important for certain services, with 59% of SMEs recognizing their value and 54% indicating they would consider switching banks if their local branch closed. This highlights the need for banks to balance digital innovation with the preservation of personal service, ensuring that digital channels can replicate the authenticity, flexibility, and active listening that define great in-person experiences.

The CX Growth Index: A New Framework for SME Banking

The CXGX, developed by Publicis Sapient, moves beyond traditional metrics like Net Promoter Score (NPS) by providing a granular, touchpoint-level view of customer experience. Built on the “Three Es”—Experience (did the customer get what they wanted?), Expectation (was the experience better or worse than expected?), and Emotion (how did the experience make the customer feel?)—the CXGX framework captures the moments that matter most to customers. For each interaction, responses are linked to specific channels such as mobile app, desktop website, live chat, call center, email, and branch visit, enabling banks to pinpoint where experiences delight or disappoint.

Why CXGX Matters for SMEs

Identify which touchpoints drive positive emotions and loyalty, and which fall into the “Valley of Meh”—forgettable, undifferentiated experiences.
Understand the emotional drivers behind SME satisfaction and dissatisfaction, such as the frustration of repeated data requests or the reassurance of proactive support during a crisis.
Prioritize investments in channels and experiences that have the greatest impact on SME retention and growth.

Insights from Recent Research: SME Satisfaction, Loyalty, and Channel Use

Uniform Satisfaction, Low Differentiation: Most SMEs are satisfied, but this is due to industry-wide adequacy rather than standout service. Banks are vulnerable to customer churn if service quality slips.
Trust and Service Quality Trump Technology: 79% of SMEs cite trustworthiness and service quality as most important, while technology and innovation are less influential in shaping opinions.
Digital Preference with Physical Reliance: 78% of SMEs prefer digital payments, but more than half expect banks to continue offering cash services for at least another decade. Even digital-first SMEs value the option of physical branches for complex or sensitive needs.
Omnichannel Expectations: SMEs want the flexibility to choose how they interact with their bank, with seamless transitions between digital and physical channels.

Applying Touchpoint-Level CXGX Insights to SME Banking

Map the SME Journey: By linking CX scores to specific touchpoints, banks can visualize the SME customer journey, identifying pain points such as slow onboarding, fragmented data requests, or inconsistent service across channels.
Prioritize High-Impact Investments: For example, if live chat achieves higher CX scores than call centers but is underutilized, banks can encourage adoption through targeted communication and improved integration. Similarly, migrating users from low-performing desktop experiences to high-performing mobile apps can boost overall CXGX scores and customer satisfaction.
Balance Digital and Human Touch: The research shows that while chatbots and AI-driven support are helpful (91% of SME chatbot users found them useful), SMEs still value the option to speak to a knowledgeable human for complex issues. Banks should invest in digital tools that enhance, rather than replace, personal service—such as AI-powered relationship manager workbenches that surface relevant insights and enable proactive outreach.
Address Omnichannel Pain Points: SMEs often encounter friction when moving between digital and physical channels, such as having to re-enter information or explain their situation multiple times. By using CXGX data to identify and eliminate these pain points, banks can create a more seamless, satisfying experience.

Differentiation Through Data, Personalization, and Embedded Services

Personalized Journeys: By segmenting SMEs based on behavior, preferences, and needs—not just size or industry—banks can tailor experiences and offers, moving from a product-centric to a customer-centric model.
Proactive Support: Using CXGX insights, banks can identify moments of truth—such as a cyber-attack or a major business transition—and intervene with timely, relevant support.
Embedded Finance: Banks can leverage APIs and partnerships to embed financial services directly into SME workflows, such as accounting or e-commerce platforms, creating new value and convenience.

Conclusion: The Path Forward for Australian Business Banks

Use touchpoint-level CXGX insights to identify and address SME pain points across digital and physical channels.
Invest in omnichannel integration, ensuring that digital innovation enhances rather than erodes personal service.
Leverage data and analytics to personalize journeys, anticipate needs, and embed banking into the fabric of SME operations.

Banks that embrace this approach will not only stand out in an undifferentiated market but will also build the trust, loyalty, and advocacy that underpin long-term growth in the SME sector.

Ready to unlock the SME opportunity?
Publicis Sapient can help you apply the CX Growth Index to your business banking strategy—book a workshop with our experts to explore actionable insights tailored to your organization.