A new whitepaper entitled ‘Embedded banking: Time to reverse the trend’ has been published by BankiFi, the open banking platform. It analyses the need for a radical overhaul within the small-to-medium sized enterprise (SME) banking sector.
The whitepaper examines the state of SME banking in 2022. The paper assesses an evolving sector, which has come under the spotlight in recent years following the well-publicised entry of new market disruptors. BankiFi’s new analysis includes a list of evidence-based findings, which summarises the current state of the SME banking market and provides new and traditional banks with a solid knowledge base to build from.
In short, the whitepaper’s four key findings are as follows:
- Relationship managed SME banking, particularly at the “s” end of the market, is not currently working.
- Regulatory change and technological advances have lowered the barriers to entry for digital-based providers within the sector.
- Mobile phones are the preferred device from which sole traders and micros run their businesses.
- The mass migration to digital banking and digital payments, expedited by covid-19, has forever changed bank-customer relations.
Alongside the conclusions, BankiFi’s new whitepaper makes several recommendations for legacy banks to consider when looking to deliver a complete suite of best-in-class products, which span consumer, SME, commercial and investment banking services. In providing the recommendations, BankiFi hopes to put banks back at the heart of business, helping them to overcome challenges posed by new entrants in the market.
To this end, BankiFi has compiled a four-point plan, which legacy banks must look to execute to achieve their market goals. This plan is as follows:
- Earn the SME’s Trust
- Make the Basics Easy
- Make SME Financial Workflow Easy
- Advise SMEs
Speaking on the publication of the whitepaper, Mark Hartley, founder, and CEO of BankiFi commented: “Banks are currently only providing a fraction of their financial management capabilities. As a result, banking businesses are now in danger of losing out to alternative providers, particularly when it comes to serving SMEs. Therefore, it’s now time for banks to think more like the markets they aim to serve, and in doing so, they stand to unlock a significant new market opportunity. In fact, there are over 5.5 million SMEs in the UK alone, with many more around the world. Moving forward, we hope our recommendations are listened to and this market offering is improved.
“The challenge for the banks is this; can they enhance their digital experience from being merely a supplier of accounts and payments to becoming an embedded workflow experience from where a business runs and operates? That’s certainly going to be a big battle in the next few years, but with the proper support it’s entirely possible. Here at BankiFi, we’re able to support banks in that effort and will do our best to assist in putting them back at the heart of business.”
BankiFi launches the white paper hot on the heels of recent announcements with TSB and Visa.