This article, written by Tom Groenfeldt first appeared on Forbes.
BankiFi is a European fintech startup that offers modern tech services, such as invoicing, payments, nudges, cash management and accounting, to businesses.
But it doesn’t compete with banks — it offers the services to banks which can then create bundles to meet the needs of their customers with such features as bank-branded accounting engines at a fraction of the cost a business would pay to buy the software from separate vendors like accounting package providers and niche banking services apps.
This way businesses get accounting and banking services through the channel they already know and use: their mobile bank channel. Think sending invoices and receiving monies, the bank separates out taxes to be paid and puts them in a virtual account, tax submission, invoice lending, loans etc. all supported by timely nudges around actions to take on a busy day.
Nationwide, the largest building society in the world, has signed on and invested in BankiFi to create strategic learnings as it develops a new small business proposition it plans to launch soon.
“About two years ago Nationwide was looking across the market and seeing a lot of disruption and a lot of opportunity,” said Emma Huntington, director of innovation and ventures at the building society. To tap into the business opportunities, it created a £50 million Venturing Fund and started looking for fintechs that could provide Nationwide with strategic learning and new capabilities.
Emma Huntington, director of innovation and ventures at Nationwide Building Society in the UK
COURTESY NATIONWIDE
“BankiFi was perfect timing as we are designing and building a new SME business.”
Although it is a retail financial member organization with savings, mortgages and checking, Nationwide has found that many members with current accounts are also small business owners with similar needs for their business and their personal banking.
“Nationwide’s brand performs extremely strongly in the SME and retail customer segments even though we don’t yet have an SME solution”
While Nationwide uses SAP as its core system, the new bank will run on a separate tech stack from 10x Banking.
The Society will launch with a current account — the BankiFi services give a hint of the direction it could take, Huntington said.
“I think we need to launch and understand how people are using it and what the takeup is, whether it attracts existing members or new, and the nature of the businesses that are using it,” she added.
That approach is a good match for BankiFi, said Conny Dorrestijn, a founding partner of the company. Figuring it out as you go along aligns with BankiFi’s micro services approach, she said.
“My founding partner Mark Hartley has a firm vision on this and while we start at the micro business angle with servicing the so-called gig economy, our sights are set on servicing the entire business banking range from sole traders, SME, all the way up to corporate customers with more sophisticated demands around treasury management, forex, etc. In a foreseeable future accounting, banking, cash management, treasury management systems and ERPs all use the same date, and this will over time merge into one ‘banking as a platform’ service.”
Huntington said that Nationwide will partner with BankiFi to run experiments.
“In my innovation area we are working with BankiFi already, testing behavioral science and combining it with capabilities. BankiFi provides us APIs and aggregation and an experimental space in innovation, not specifically related to the SME bank, but it creates an insight in what the true nature of cross-silo banking can offer and how we can offer a really relevant service to micro businesses and sole traders.”