On 16th November, the open finance community took their seats to hear from some of the leaders in SME finance. The panel, titled , Open for business: innovation in SME finance, explored some of the key challenges that SMEs are facing at this stage in the pandemic, how open banking is accelerating the process of application to money in the bank account and what SMEs need next.
To kick things off, moderator Ronan O’Dea from Validis, asked how the pandemic had changed the day-to-day operations for many SMEs who may have no longer been able to accept cash payments from their customers. SMEs needed digital payments and business accounts in the same way that personal accounts allowed for. Jordan Shwide of Monzo asserted that the power of digital acceleration and user needs on this scale can produce incredible new products and innovation.
As Julie Ashmore of NatWest Rapid Cash summed up, “time is money to SMEs”; SMEs need and expect quick decisions and access to cash. Open banking has quickened the pace in decision-making, taking the reliance off the customer in providing background details for creditworthiness. These details can now be accessed through open banking without the customer having to lift a finger.
Simon Cureton of Funding Options highlighted another key challenge in SME lending and a requirement of SMEs themselves – “it’s not one size fits all”, and businesses do not always understand all their funding options. Businesses have unique needs and one fast option is simply not good enough. He highlighted how multiple data points are crucial in matching SMEs with products.
Some, including a number of small-medium businesses themselves, consider SME financing to be ten years behind personal finance. But with open banking accelerating decisions and increasing data points, better decisions are made in real-time, allowing for cash to be provided in less than 24 hours, as opposed to 90 days.
The SME landscape can prove a challenge, but there is a great deal of space for innovation and the reward for utilising open banking to support SMEs in achieving their goals will be transformational. We will continue the discussion at FTT Lending 3.0 on 30th March, where we will explore digital transformation and the SME lending makeover.
You can now watch the full recording of this panel from the FTT Open Finance stage below.
Ronan O’Dea, Head of Product, Validis (moderator)
Simon Cureton, Chief Executive Officer, Funding Options
Jordan Shwide, General Manager, Business Banking, Monzo
Julie Ashmore, CEO, NatWest Rapid Cash