Yesterday, together with Katalin Kauzli, we discussed what modern SME banking should look like.
We all know the fact that SMEs are under-covered with the banking services. The latest shows that only 14% of SMEs consider their finnacial needs met.
How to cover SMEs with financial services these days? Well, the answer is that creating a new product for SMEs is not enough. The most important thing is when and how to offer such a product to SMEs because they don’t have time, money, and people to search the market for their own and pick up from the solutions available on the market (if any) the right ones for them.
SME Banking offer should be embedded into platforms or ecosystems SMEs are using already, it should be offered at the right moment of customer lives (event-based offer).
My favorite example here is the best way to sell factoring/invoice finance is to offer that service at the moment the customer issued the invoice, instead of calling at 9 am and asking SME customers whether they need factoring (SME’s thoughts is “What is it?”) or putting on the website application form with a call “Apply for factoring” (again, SMEs don’t know this word, and there is no sense to educate them be a factoring product manager and operate with the terms of reverse factoring etc. You just should speak the language your customer speaks, instead of teaching them to speak your banking corporate language.
SMEs will expect a fully integrated offer and platform from which to access not only financial products but all the services they need to run their businesses: online/mobile banking integrated with e-invoicing, accounting, cash flow projection tools, and embedded finance available at 2-3 clicks (speed matters!). Today, everything is about ecosystems. Today – it’s about closed ecosystems, tomorrow – we expect to have open ecosystems, with open protocols and standardized interfaces which will decrease integration efforts and costs and bring larger benefits for all participants and customers.
Financial providers will have multiple roles in those ecosystems – from embedded finance to ecosystem orchestrators and open ecosystem participants.
Start budling your ecosystem now or participate in the existing ones – these are the strategies financial organizations should choose right now.
Watch the webinar recording to get more insights on that and some examples from the region:
