Apologies, we certainly don’t want to alarm you - but can you hear it as well? That hissing and rustling? Quiet at first, then louder. It soon gets really loud - and then it’s gone. That’s what it sounds like when you miss a train.
As I said, we don’t want to instill fear into you, but a certain amount of panic is definitely warranted. After all, there’s a lot of hissing and rustling going on in the banking world. GAFA, challenger banks etc. have long been shaking up the personal banking space with cutting-edge, engaging and fully digital customer experiences.
Traditional banks are following suit, taking their cue from startups and following their lead. Looking after money has never been so easy for private customers, since everything can be managed quickly and easily via a smartphone. People quite literally carry round their banks in their pockets. And this is available to everyone, virtually free of charge.
SME Banking: Why NOW Is the Time to Act
Business banking is also gaining momentum. It’s only a matter of time before the full force of digitalisation and customer experience reaches business customers. Let’s be honest, there’s not a single reason why business customers - whether corporations or SMEs - should still have less convenient and largely analog banking.
After all, there are real people behind companies, who naturally demand a convenient and contemporary banking experience with which they’re familiar from their personal account. They also want to reap the benefits of sophisticated, digital user experiences in the banking sector. SMEs have been neglected by their banks for far too long.
In order not to miss the boat, banks should not only adapt their business models in the business customer segment as soon as possible. They should also digitalise all their offerings and create an ecosystem that offers customers a range of services that go beyond traditional banking.
Does this sound like a mammoth task? You’d be right to think that. Some are tackling it on their own, while others are relying on FinTechs that supply ready-to-use solutions. Of course, this accelerates the digitalisation process immensely. After all, older, established banks don’t have the benefits of a startup, i.e. the ability to be agile and fast. Neither their corporate structures nor their IT setup allow it. Nevertheless, they can offer decades of experience and an immense data record, which must be used to design an innovative and digital customer experience.
Here are three visions of what digital, data-driven and customer-centric business banking of the future might look like:
Vision 1: Easy and Central
Unless an entrepreneur has founded a startup in the FinTech or finance sector, it’s highly likely that banking is not one of their core skills and they probably don’t have much interest in it. In the broadest sense, banking is a necessary evil for companies. In short, the bank that makes the process as easy as possible for entrepreneurs wins.
A comprehensive and intuitive financial management system with an appealing look and user-friendly interface is what constitutes easy. For example, our Business Finance Manager (BFM) is a financial cockpit for SMEs: it provides entrepreneurs with an overview of all their financial transactions from any bank thanks to account aggregation.
Being AI-driven and data-driven, the BFM enables business customers to have cash flow and liquidity planning under control at all times. Business customers would ideally like their finances to manage and even optimise themselves, and modern business banking supports this desire through ongoing, accurate data analysis and enrichment. AI-driven financial assistants can derive personalised financial optimisation suggestions for the corresponding customer based on this.
Vision 2: Perfectly Tailored to My Needs
The needs of SMEs in particular could hardly be more diverse. On the one hand, you have a young brewer who needs a business account to start their own craft brewery. On the other hand, you have a 150-strong tech startup preparing for a Series C round. The big challenge facing banks now is to provide all these customers with offers and solutions that are as tailored as possible to the business customer’s individual situation.
The brewer needs a seamless, simple and fast onboarding process, the possibility to open a business account online in minutes without any hassle and the ability to process payments as soon as possible. Business plans and financing will soon enough become pressing issues, which is why banks should ideally be able to provide end-to-end digital support.
On the other hand, the more established business needs a banking partner to support it in terms of cash flow and expense management. Ensuring seamless international payment transactions could become crucial in the case of planned expansion, investor relations or even exit planning.
Tomorrow’s business banking understands the lifecycle of modern SMEs and is able to deliver tailored support at every stage.
Vision 3: More Than Just Banking
Banking, tax and other financial matters already cause a massive headache for many business founders. However, tomorrow’s banks can stand out from the crowd by making life easier for their SME customers. Digital business banking of the future is more than just a financial management tool; it also offers interfaces to other areas such as tax offices, making it a comprehensive business assistant.
Digitalisation and Open Banking have created an excellent ecosystem for API-based services. Although integrating these interfaces into your system does pose a major challenge, it is one that banks wanting to stay ahead of the game urgently need to overcome. Once again, FinTechs with smart white label solutions may be the best solution.
Get on Board, We’re Leaving!
When everything is hissing and rustling, there’s one thing you shouldn’t forget: digitalisation in the financial sector initially served to improve the business, processes and operational efficiency of banks. Nowadays, however, digitalisation should also improve the experience of business customers in a tangible way.
New competitors in the financial sector, especially innovative FinTechs, have long since recognised this and have gained a foothold in this area. However, it’s not too late for the established players to catch up and create a new, better banking experience for their business customers. Where it makes sense to do so, they should enlist the help of resourceful FinTechs.
The main thing is that you’re on board when the train leaves for the digital future of business banking.