Myths, misconceptions and misinformation encompass all points of the monetary business. Whereas most customers perceive the specter of not realizing how the sophisticated monetary sector works, myths and misunderstandings additionally harm the larger gamers: Monetary companies, organisations and digital banking establishments.
Within the midst of those misunderstandings, Mark Hartley, CEO of enterprise know-how fintech BankiFi, has launched a brand new ‘myth-busting’ marketing campaign centred round digital-only neobanks, and publicly denouncing quite a few deceptive claims.
BankiFi is a know-how platform designed to assist banks and different legacy monetary establishments enhance their service to small-to-medium enterprises (SMEs) by offering a set of built-in companies, akin to accounting, invoicing and funds.
As a part of these efforts to spotlight points confronted by small-to-medium-sized enterprises (SMEs), BankiFi is shining a highlight on the advantages on provide to SMEs after they select to work with banks that prioritise customer-centric approaches.
The largest myths of neobanking
Hartley outlined the three of the most important myths that stay within the house:
The primary delusion: that digital-only banks have already efficiently captured the SME market.
Many consider that each Monzo and Starling have every achieved over eight per cent of market share after assembly their Banking Competitors Treatments (BCR) commitments.
Monzo has publically acknowledged that it has over 250,000 enterprise present account holders, whereas Starling revealed it additionally has 520,000 small enterprise accounts. Regardless of these spectacular numbers, it stays unclear whether or not these accounts are SMEs’ major or secondary accounts.
BankiFi has urged that, at present, digital-only challenger financial institution and fintech options are sometimes utilised by SMEs to complement the companies supplied by bigger firms offering each bodily and digital experiences.
In the end, the endurance of establishments of this nature has been a lot higher than many individuals anticipated, and it stays the place SMEs really feel snug depositing, sending, and saving cash – regardless of the efforts of the BCR to increase competitors amongst suppliers of monetary companies to SMEs.
The second delusion: Regulation has stifled digital-only neobank development
2022 noticed an all-party parliamentary group recommend the ‘one-size-fits-all’ strategy to banking regulation was slowing down neobank development. Since then, the sector has seen loads of turbulence, reaffirming the significance of the regulator’s function in defending shopper and enterprise funds.
BankiFi reiterates that the UK’s regulatory framework is among the many finest on the earth and shouldn’t be weakened simply to allow a extra aggressive area. Lighter regulation is just not the fitting method ahead if it causes a danger to folks’s companies and livelihoods.
The third and remaining delusion: SMEs all need fully various things from neobanks
Whereas SMEs are available in all completely different sizes and styles, they battle primarily with the identical points. Numerous SMEs need banking options that assist them to pay and receives a commission to alleviate points round late funds.
Within the UK, SMEs are owed a median of £250,000 in late funds in response to Time Finance. QuickBooks has additionally discovered that SMEs within the US are owed $304,066 in late funds. The challenges of this reality are compounded by JPMorgan Chase Institute analysis, which exhibits that fifty per cent of SMEs are surviving with fewer than 15 money buffer days.
“The most effective methods to handle cashflow issues is to offer folks entry to instruments that assist them to receives a commission extra shortly. Shifting ahead, this have to be an enormous precedence for enterprise banking companions working with SMEs,” Hartley defined.
