As SMEs have grown in number, banks are potentially struggling to keep up as only 9% of small businesses feel like their bank supports them.
Someone who knows all about this is Morgan Browne, founder and CEO of Enterpryze. As an avid businessman and technology enthusiast, Morgan is passionate about helping SMEs succeed financially, and empowering them to achieve their full potential. Morgan has worked across Asia, Africa, Europe and North America. In 2017, Morgan officially launched Enterpryze, the world’s first mobile-first solution for SAP Business One.
Here, Morgan explains how he’s successfully worked with overseas banks and fintech and how this has helped SMEs financially succeed.
Over the last three years, we have partnered with many banks in different countries, Europe, Asia, Africa, and South America. All with the same challenge. How do you understand your SME customers better? As SME numbers continue to grow, Banks can’t provide the kind of personal relationship they could before when the branch manager knew all his local customers intimately. Since then, they have struggled to understand their SME customer and to support them in a value-added way.
Today only 9% of SME customers feel that their bank supports them and in most economies 99% of businesses are SMEs. That leaves a lot of organisations that generate a large proportion of a country’s revenues without the necessary support to not just succeed but survive.
We work in partnering with banks to help them help their customers. Providing business management solutions that support their SMEs right the way through to the superscalar. Typically, but not restricted to, business banking customers.
Our first partnership was with UOB in Singapore. An adventure for an Irish Entrepreneur who had only ever been to Asia once before. But that’s where the innovation was in demand. Europe was proving too slow to want to adopt new technology. Instead of focusing on bringing their legacy solutions up to speed. UOB realised by working with us they could do both. Get the speed of innovation from us whilst working on improving their own solutions in tandem.
The Asian desire for innovation isn’t all down to UOB. Since we opened for business across South East Asia, we see a culture and desire to bring out technologies for SMEs. To help them improve how they run their businesses and offer value-added services. In contrast, to say, Africa where banks and countries have a need for digitalisation of their SMEs, their currencies, and their payments, we have seen that Asian banks are driven by a desire to innovate and use technology to help their customers.
Contrast that with our experiences in Europe and it is much slower. There is no ideation or creativity on how better to support the SME customer. I am sure there is a desire, but that isn’t the culture.
We offer a suite of solutions for SMEs from simple invoicing and payment solutions right the way through to ERP solutions for larger SMEs. This maturity model provides a value-added service to their customers and scales as the SME grows. Ensuring the Bank can maintain the system’s relationship with the customer during their evolution.
Take our mCollect solution we have launched with UOB. Enabling customers to use PayNow, Promtpay, Duitnow, and HKQR to take payments from customers on a mobile device that reconciles against the invoices and reconciles with the bank seamlessly. Last mile delivery companies like Boong Food and UOB mCollectare using this to simplify their collections from customers.
So, for many that would be innovative enough. Simplified payments using QR codes, reconciliations with invoices and seamless connectivity for Bank Reconciliation. But in parallel, we have been building a new solution called mCollectX designed for retailers to take payment from customers. Multi-user, multi-branch and reporting capabilities to simplify payments. This solution provides a digital payment option that only requires a bank account and at a fraction of the cost of merchant services.
This is the pace of innovation and the desire to use technology to support the customers we haven’t seen to date in Europe. Unfortunately, I believe that if this trend isn’t changed soon that these traditional banks will be left with unprofitable revenue streams whilst Fintechs take the cream.
Our efforts in Europe have been in vain and there is more demand in Africa, the Middle East, and South America. There is a desire to bring solutions to market there also, but the pace and culture are somewhere between Asia and Europe. We have little option but to partner with a Fintech to provide this technology. Launching in March we integrate with the US-based Plaid to offer integration via the PSD2 network. A far cry from perfect and unfortunate. I’m sure that Plaid’s model isn’t to be a middleware operator in the future. The recent takeover conversations with Mastercard will inevitably mean new monetisation programs to leverage the relationship with the end customers. Inevitably adding to the lost opportunity for the traditional banks in Europe and North America.
We remain committed to our model of helping traditional banks innovate to support their SME customers. We know, as the Asian Banks know, that technology is the only way to support the large numbers of these companies within a bank’s customer base. That technology opens up new market opportunities like supply chain financing and more. That the only way they can support their business customer is knowing them better and technology is the answer. It certainly can’t be 9-month-old audited accounts, transaction history of bank movements, and outdated technologies that don’t support the SME anymore.
Asian banks get this. They are years ahead. Europe needs this. They have a long way to catch up.