About 90% of Financial Institutions Emphasize "Early Warning Management," but Siloed Operations are a Challenge on the Ground. Differences in Response Status Between City Banks and Regional Banks.

YK Planning Co., Ltd. (Location: Hofu City, Yamaguchi Prefecture, President: Tatsunori Okamoto) conducted a survey on "The Reality and Challenges of Early Warning Management in Financial Institutions" targeting: 1) Individuals working in financial institutions involved in corporate business (sales, lending, screening, management support, planning); and 2) CEOs and executives of small and medium-sized enterprises (SMEs).

Amidst increasingly severe business environments for SMEs due to soaring prices and labor shortages, "early warning management" to detect early signs of corporate management deterioration is indispensable for financial institutions.

However, reliance on past financial data and cumbersome information gathering may prevent a full grasp of the real-time situation.

The later the worsening situation is noticed, the narrower the effective options become for restoring cash flow.

In reality, to what extent can financial institutions grasp the "early warnings" of management deterioration, and are SMEs receiving appropriate support at the right time?

This survey delves into the reality and challenges of early warning management and the potential for timely data sharing as an improvement measure, from the perspectives of both financial institutions and SMEs.

Approximately 90% of Financial Institutions Emphasize "Early Warning Management." The Key to Detecting Anomalies Lies in "Financial Data, Hearing, and Dialogue."

First, we asked individuals working in financial institutions involved in corporate business (sales, lending, screening, management support, planning).

When asked, "At what stage do you primarily notice signs of deterioration in the management status of your client companies?" the following results were obtained:

As a general trend, the most common scenario was grasping signs of management deterioration at the "early financial change stage," such as changes in deposits, withdrawals, and cash flow.

Comparing by business type, city banks, in particular, had a higher percentage than other financial institutions in noticing anomalies at the "early financial change stage" (over half), suggesting they are quickly capturing the movements of their client companies through early monitoring systems and utilization of systems.

On the other hand, a certain number of cases were observed where anomalies were only noticed after confirming post-event figures, such as losses or financial deterioration in monthly trial balances or financial statements.

So, specifically, what kind of information leads to the perception of signs of management deterioration?

When asked about the "factors that led to noticing signs (early warnings) of deterioration in the management status of client companies" by those who answered "able to grasp at the early financial change stage, such as changes in deposits, withdrawals, and cash flow" or "able to grasp from deterioration in monthly trial balances, etc." in the previous question, the following results were obtained:

Although there are slight differences in ranking among financial institutions, "financial data," "hearing about cash flow," and "communication with management" emerged as the three major pillars for detecting early warnings.

How important is "early warning management" considered for preventing management deterioration?

When asked, "How important do you feel 'early warning management' is for preventing the deterioration of client companies' management status?" approximately 90% of the total respondents answered "very important" (58.4%) or "somewhat important" (33.9%).

The majority consider early warning management important, recognizing it not only as a defensive measure for financial institutions to reduce bad debt risk but also as an indispensable initiative from the perspective of management support to prevent corporate bankruptcies and protect the regional economy and employment.

The Wall on the Ground is "Siloed Operations." Response Gaps Emerge Between City Banks and Other Business Types, with Calls for "Systematization" as a Solution.

While the importance of early warning management is recognized, to what extent is it actually being handled on the ground?

We continued to ask individuals working in financial institutions involved in corporate business (sales, lending, screening, management support, planning).

When asked, "Is your organization currently adequately responding to 'early warning management' for client companies?" the following results were obtained:

Comparing by business type, city banks had a higher percentage of "adequately responding" answers than other business types.

On the other hand, the percentage of respondents who answered "adequately responding" was less than 20% for regional banks, second-tier regional banks, credit unions, and credit cooperatives, indicating a disparity in response levels between business types.

This suggests that precisely because city banks are "adequately responding" to early warning management, they are able to detect anomalies earlier at the "early financial change stage," such as changes in deposits, withdrawals, and cash flow, as mentioned earlier.

Next, when asked about the "reasons why early warning management of client companies' management deterioration is difficult or not adequately handled" by those who answered "not very adequately responding" or "not adequately responding at all" in the previous question, the following results were obtained:

In all financial institutions, "variability in the ability to detect early warnings" and "lack of time for communication" were ranked high.

This indicates a situation where the accuracy of early warning management depends on individual experience and skills, leading to "siloed operations."

Furthermore, the time required for information gathering and analysis is also considered a factor hindering response in busy work environments.

What is considered necessary to solve the challenges on the ground and make early warning management functional?

When asked, "What kind of initiatives do you think are necessary to be able to adequately respond to early warning management of client companies' management deterioration?" the most common answer was "increasing the frequency of submission of financial information such as monthly trial balances" (53.1%), followed by "introduction of a system for regularly obtaining financial information" (46.5%) and "strengthening the collection of non-financial information (industry trends, management personality, etc.)" (36.7%).

Many respondents are seeking "increased frequency of submission of financial information" and "introduction of a system for regularly obtaining financial information," indicating an urgent need to create a system for timely and efficient collection of objective data to enhance the effectiveness of early warning management.

On the other hand, "strengthening the collection of qualitative non-financial information" obtained from understanding industry trends and dialogue with management also garnered about 40% support.

It is thought that a multi-faceted monitoring system combining digital and analog approaches is required, which quickly captures changes in numerical values using systems while discerning qualitative changes through face-to-face communication.

Next, when asked, "What financial indicators (numbers) do you think are useful for early detection of signs in early warning management of client companies' management deterioration?" the most common answer was "cash and deposit balance/cash flow status" (37.8%), followed by "trends in operating profit/ordinary profit" (35.7%), "loan repayment status/loan balance" (35.7%), and "sales trends" (30.8%).

The close ranking of the top three items indicates that both "profit (P/L)" and "cash" are closely monitored in early warning management.

Even if a company is profitable, the risk of business failure arises if cash on hand runs out, highlighting the reality of tracking cash flow, such as deposits, withdrawals, and loan status, with the same intensity as profit and loss status.

Furthermore, "sales trends" also received about 30% support, suggesting that sales fluctuations, which are the core of business, and the resulting cash movements are being monitored from multiple angles.

Contact Frequency with SMEs is Polarized. Appropriate Support Reaches Only 40%.

Is the "early warning management"-based support that financial institutions are exploring actually reaching companies?

From here, we change our perspective and ask CEOs and executives of SMEs.

When asked, "How often do you have contact (visits, phone calls, emails, etc.) from your main financial institution?" the most common answer was "almost no contact" (33.8%), followed by "once a month or more" (22.5%) and "once every 2-3 months" (21.4%).

While financial institutions emphasize "early warning management," about one-third of SMEs receiving support feel that "there is almost no contact," revealing a gap between the two sides.

Additionally, the fact that "once a month or more" and "once every 2-3 months" are also high rankings suggests a polarization in the frequency of contact from financial institutions.

Next, when asked, "Are proposals for loans and cash flow support tailored to our company's management status and needs being made by our financial institution at an appropriate time?" approximately 40% answered "always receive proposals at an appropriate time" (11.1%) or "mostly receive proposals at an appropriate time" (32.5%).

The proportion of respondents who answered "receive proposals at an appropriate time" was limited to about 40%. While there are SMEs receiving appropriate management support such as loans that match their business status and funding needs, the reality is that many SMEs have never even received a support proposal.

With challenges remaining in the current situation, how receptive are CEOs and executives themselves to identifying their company's management issues using data?

When asked, "Are you interested in early identification of management issues by utilizing management data such as financial and non-financial data?" about half answered "very interested" (16.5%) or "somewhat interested" (36.6%).

Many respondents showed a positive interest in identifying their company's management issues.

Since SMEs also have the desire to utilize management data, if a system can be established where both financial institutions and SMEs can visualize and share data, it is expected to lead to more timely and effective management support.

Summary: Systematizing Early Warning Management and Bidirectional Data Visualization Will Strengthen Financial Institutions' Management Support.

This survey has clarified the importance of "early warning management" for client companies in financial institutions, the response status on the ground, and the expectations of SMEs.

While many financial institutions recognize the importance of early warning management, the execution level shows disparities in response status between business types.

City banks, in particular, have a higher percentage of respondents who answered "adequately responding" to early warning management compared to other business types, and it is this organizational response system that enables "early detection at the initial financial change stage."

On the other hand, other business types had a lower percentage of respondents who answered "adequately responding" than city banks, highlighting the remaining challenges for the industry as a whole.

Factors making early warning management difficult include the difficulty of obtaining timely data, "siloed operations" due to variations in the experience and skills of personnel, and "resource limitations" such as insufficient time for communication.

As a means to solve these challenges, many on the ground cite "increasing the frequency of financial information submission" and "system introduction" as top priorities.

In busy work environments, there are limits to increasing data collection frequency solely through manual work or manpower, so "creating systematic mechanisms" that enable timely information sharing is considered the practical solution required to make early warning management functional.

Meanwhile, looking at the companies receiving support, contact frequency from financial institutions is polarized, and approximately 40% feel a support gap, with some stating they have "never received appropriate proposals."

However, about half of executives are "positively interested in identifying management issues by utilizing data."

Since there is strong motivation on the company side as well, to bridge this gap, it will be important to establish a system where both financial institutions and companies can visualize and smoothly share data in real-time.

'bixid for BANK,' a Common Platform Connecting SMEs and Financial Institutions.

YK Planning Co., Ltd., which conducted the survey on "The Reality and Challenges of Early Warning Management in Financial Institutions," offers 'bixid for BANK' (https://bixid.net/finance/index.html) as a common platform connecting SMEs and financial institutions.

'bixid for BANK'

By utilizing accounting software data, companies can easily grasp their management status, and financial institutions can provide support and communication while detecting early warnings.

- Collaboration Image According to Purpose -

- Financial Data x Accompaniment Support Model

This model involves sales and field representatives proposing management support services to client companies, initiating continuous dialogue and accompaniment support based on the visualization of accounting and financial data. It enables increased customer communication, dialogue based on financial data, and training of junior bank employees.

- Financial Data x Corporate Portal Utilization Model

This model involves posting management support services on a corporate portal, making them accessible to client companies when needed. It is easy to provide even non-face-to-face, and it also enhances the overall value of the portal. It enables increased utilization of the corporate portal, enhanced value of the portal, and non-face-to-face service deployment.

- Financial Data x Business-Oriented Accompaniment Support Model

This model realizes dialogue and accompaniment support that delves into the past, present, and future of client companies by utilizing not only quantitative grasp of financial data but also qualitative information from business assessments. It enables dialogue that considers business aspects, understanding of companies across past, present, and future, and creation of support opportunities beyond financial matters.

View Details

YK Planning Co., Ltd.: https://www.yk-planning.com/

Management Support Cloud 'bixid': https://bixid.net/

Inquiries: https://bixid.net/contact/index.html

Survey Overview: "Survey on the Reality and Challenges of Early Warning Management in Financial Institutions"

[Survey Period] June 2, 2026 (Tue) - June 3, 2026 (Wed)

[Survey Method] Internet survey conducted by PRIZMA (https://www.prizma-link.com/press)

[Number of Respondents] 988 people (1) 286 people / 2) 702 people)

[Survey Target] Monitors who responded that they are 1) working in financial institutions and involved in corporate business (sales, lending, screening, management support, planning) / 2) CEOs or executives of SMEs at the time of survey response.

[Survey Source] YK Planning Co., Ltd. (https://bixid.net/finance/index.html)

[Monitor Provider] Sakurisa