The battle: Banks vs Challengers
When we talk about winning the ‘front door’, we mean to succeed in the ongoing battle between banks and fintech’s to be the ‘go to’ digital service provider for small businesses to conduct their banking, as well as run their business from. With deep-rooted tradition on one side, and evolving technology on the other – the battle lines have well and truly been drawn. Banks vs fintech’s – but who is expected to win?
Keep reading for key insights or download your free whitepaper to delve deeper into how banks need to up their game in order to be the ‘front door’ for small businesses.
The threat for banks:
Embedded banking as we know it, is a concept that incorporates payment and banking services within a third-party digital experience. Several financial institutions have already settled into the expectation that tech-first platforms will be where SMB’s feel the most comfortable doing their digital banking in the future. However, all institutions must recognise that the challengers adopting embedded banking into their offerings will become major disruptors for banks. This is because fintech's and digital challengers such as Tide or Monzo think like the small business owner, considering financial management workflows - from order-to-cash and procure-to-pay to reporting and analysis - rather than rigid banking products.
Fintech's are meeting these demands for digital workflows by the SMBs, thus dismantling the bank's SMB relationships and intercepting core banking revenues in the process. Banks and FI’s must now wake up and pay attention to this threat. They still have the capabilities to be the 'front door' for SMBs because consumer trust in the traditional bank has not gone away – but in order to rise to the challenge, bank’s must alter their approach towards small business banking to meet the requirements of the small business owner.
The solution?
It’s time for banks to embrace embedded banking, but not as we know it. Specifically, adopting the approach of ‘Outside In’ banking as opposed to ‘Inside Out.’
Banks can start to leverage their position in this battle by reassessing their digital offering as well as the experiences they provide to their SMB customers. In short, banks need to start delivering more compelling solutions which can address common pain points that shake the small business community - such as late payments - as opposed to offering a linear and transactional experience their small businesses frequently outgrow, causing them to access a more effective provider.
Download your Whitepaper now!
This battle between banks and fintech's to be the 'front door' for small businesses is one of multiple concepts that we examine within our latest Whitepaper: Embedded Banking but Not as You Know It. We also uncover how making the shift from 'Inside Out' to 'Outside In' banking is the key for financial institutions to win this ongoing battle
Discover what we mean by 'Outside In' banking by downloading your copy of our whitepaper today.