Our friends at RedCompass Labs have released their latest whitepaper, commissioned by BankiFi, detailing the opportunities that SME banking channels present to banks and financial institutions (FIs). This white paper also outlines what it costs these FIs to run their digital banking channels as they are today and understand what the costs would be to update them.
As a leading provider of embedded banking solutions, we have commissioned a new white paper in partnership with and authored by RedCompass Labs, a world leader in good and bad payments technology. Titled “SME Banking Channels: converting a money pit into a business opportunity,” the report explains the challenges banks face when offering digital solutions and how banks can most effectively and lucratively deliver cutting-edge technology.
Our findings concluded that, although most SMBs initially look to their financial institutions for payments and accounting services, most banks are unable to or are unwilling to provide digital solutions that are on par with third-party services and market challengers. This is not ideal considering the fact that a rise in open banking by about 30% shows that small businesses are increasingly turning towards third-party service providers.
Also, between technology and staffing costs, banks struggle with the cost of ownership for their in-house digital channels. Our report concludes by noting that banks are able to eliminate these costs by partnering with external service providers to offer top-of-the-line technology at the best price for the bank.
The white paper takes full inventory of the small business market in the United States, stating that small businesses make up 90% of all businesses in the country and employ roughly half of all Americans. The study also notes that small businesses in the U.S. spend about $225 billion annually on payments and accounting services.
“We’re seeing a real crisis for both financial institutions and small businesses. There is plenty of demand for payments and accounting services among small businesses, but financial institutions are disincentivised to offer those solutions given the current state of the market. Through external partners like BankiFi, banks can have the best of both worlds, offering the best technology with minimal cost to the financial institution.” - Keith Riddle, CEO of BankiFi Americas.
“In our discussions with financial institutions, it became apparent that it was quite challenging for them to quantify the costs and the benefits associated with their SME banking channels. We’ve developed a model for banks to better understand these drivers in order to refine their channel strategies for this important client segment.” - Kjeld Herreman, Head of Strategy Advisory at RedCompass Labs
Download your free copy by clicking the button below.
Elle Rushby is the Marketing Executive for banking and technology company, BankiFi. With a passion for content creation, copywriting and carving marketing strategies (to name but a few), she is very much enjoying implementing her creativity into the world of BankiFi.