Our work in... Business Banking
Over the past few years, a collection of socio-economic, technological and regulatory changes have presented challenges and opportunities to those operating within the business banking industry. We’ve witnessed how these changes have evolved firsthand and supported a range of firms in using them to their advantage. Over this period, we’ve gained insight into critical challenges and opportunities, and adapted our offering to meet them.
What we’ve seen
At one end of the market, continued growth in SME numbers has increased the demand for offerings that cater to the needs of small and medium-sized businesses. And although this isn’t anything new, how these needs are evolving is where the greatest change is happening. For the large proportion of small businesses, where the founding team can be counted on one hand, core banking activities are conducted by individuals whose experience lies in the product or service they’re offering, rather than in finance. For them, their expectations of banking are shaped by the growing ease and simplicity of personal banking – led by the ever-growing neo-banks and larger players investing heavily in their digital offerings. Opening an account, making payments, applying for products and getting support should be done in a matter of minutes, at the touch of a few buttons. Business-focused bank, Tide, along with Monzo, Starling and Revolut et al. launching their business offerings, are paving the way for what’s to be expected. Beyond the core needs of a current account, these players are expanding to offer complimentary financial products — including invoicing and merchant services — whilst integrations ensure they play nicely with your chosen accounting software. Like with personal banking 5+ years ago, traditional high-street banks are being forced to play catchup – improving their digital offering and the ease of accessing critical financial products. Notwithstanding all the activity, for both SMEs and corporates, ever-evolving expectations still outstrip service delivery – presenting lucrative opportunities for existing players to evolve and new entrants to swoop in.
Despite the evolution of banks’ digital offering, there’s one fundamental money issue that’s as relevant for businesses now as ever – cash management. Having long left the golden era of essentially free debt, in a zero interest environment, higher levels of interest means tighter cash management is critical. This is leading to significant innovation and product development in the areas of accounts receivable and treasury management tools, to help businesses convert more of their assets to cash more reliably. Whilst in the corporate world, cash management interfaces are amongst the most uninspiring and hard to use. As this trend looks to continue, there’s opportunities at both ends of the market.
For SMEs requiring a lending facility to aid the running of their business or help grow to the next level, the existing offerings from the banks are often not suited to the needs of these businesses. This is despite SME lending being the focus in the Fintech space from 2018-2022, as the BCR issued grants to stimulate SME lending in the fallout of the RBS divestment programme that never happened. This resulted in a rush of small business lending providers across secured and unsecured lending, but it didnt materially change the SME lending market in favour of new entrants. Incumbents still dominate. Our research with small businesses suggests that access to capital was never really the issue – there are a variety of unhelpful mental models when it comes to lending in small businesses that mean lots of new businesses are under capitalised, and often use their own personal lending facilities to top up the coffers.
Beyond core banking needs, many first-time business owners are seeking additional help and support which banks are well-positioned to support. Business planning and operational tasks are common areas new business owners are tackling for the first time, whilst the mental stress and pressure of going solo are challenges individuals often end up fighting by themselves. The reality is that businesses don’t wake up thinking about their bank. They wake up worried about cashflow, how to acquire their next big customer, or how to retain their best people. Run of the mill banking admin is simply an unwanted distraction. Like with the trusted bank manager relationships from yesteryear, having a bank you can trust to have your best interests in mind — and can support you with practical advice, tools and resources — is an invaluable asset for business owners.
Inevitably, the growing expectations so prevalent within the SME banking sector are shifting into the corporate banking world. Users of banking products and services in this space are equally using the digitally optimised offerings within and beyond personal banking, therefore there’s a growing expectation that all experiences should be just as seamless. When this is applied to internal processes within the larger banking institutions, improving digital experiences isn’t just an opportunity for delight, it’s become a critical cost-saving tactic – reducing the time associated with manual activities, whilst minimising costly mistakes.
“Digital transformation” within large banks is hardly a new topic, but the way many are approaching the brief is evolving. The growing sophistication and popularity of no-code tools, generative AI, and the ability to create reusable assets across an organisation present simpler and quicker solutions to digitising core elements of a banking service, simultaneously meeting users’ growing expectations and achieving critical business objectives. That said, the idealised startup inspired structures, processes and setups — inspired by the likes of Spotify and plastered all over Medium — will never be the reality for longstanding organisations with legacy technology and longstanding processes. A more realistic approach takes inspiration from the tech natives and utilises the new powerful technology on hand, but applies it with a large dose of pragmatism – accommodating existing tech stacks, ways of working and business constraints.
What we’ve done
We’ve worked with firms across the whole business banking landscape — from new entrants and market leaders to corporate behemoths and supporting players — across a broad range of topics, including internal and externally facing digital products and services.
- Defining the strategy for a digital accounting platform to expand its offer into financial services and lending to further support their small business customers
- Facilitating partnerships between a digital accountancy platform and digital lenders to design, develop and launch custom credit and lending products seamlessly integrated core workflows
- Creating the go to market strategy to successfully launch and communicate new credit and lending propositions to small business owners and their advisors
- Establishing an in-house SMB focused research capability at a global Fintech to ensure customers needs, behaviours and motivations informed strategic and product roadmaps
- Analysing a corporate bank’s core banking platforms user experience, identifying priority areas for improvement across accessibility, information architecture, and interaction consistency
- Defining a ‘North Star’ service vision and blueprint for a modern corporate lending business, encompassing internal workflows and applications and client facing products and services
- Designing and supporting the development and launch of an internal deal origination tool private equity fund finance at a global corporate bank
- Defining the CX for a new clearing, successfully supporting their applications for a banking licence
- Designing the banking platform for a new business and corporate bank from onboarding and custom dashboards to payments and treasury management services
- Creating and launching the website for a challenger bank, effectively communicating the breadth of their offerings and the uniqueness of their propositions and aspirations
- Designing and launching a comprehensive developer studio to showcase a challenger bank’s innovative banking solutions and support their developer community.
The questions we can help to answer
Proposition
Are you offering differentiated value to a specific subset of the market? Is there more you can do beyond core banking services?
Product Marketing
Are your products positioned effectively in the most suitable channels with the most impactful messaging? Have you combined quantitative data with qualitative insights to validate this?
Product Experience
Are you delivering a seamless experience that meets the needs of your audience across the core activities of managing a business?
Product/Programme Audit
Are your current initiatives, partnerships and/or programmes delivering the desired value? How might they improve?
Growth Strategy
How might you expand your product offering, or penetrate new subsets of the market, to meet growth ambitions?
Threat Scanning
What market or competitive forces might undermine your current product strategy?
Product Strategy
How would you need to evolve your product offering to deliver additional value across a broader range user needs?
Acquisition Strategy
What new routes to market might you consider taking to better access identified growth areas?
Actionable Vision
Where can the business go? What might this evolution need to look like? What would need to be true for it to be successful?