The future is looking bright for small business banking. Here are 6 new trends in the sector that are important to keep an eye on:
- Digital service integration – as this trend continues to develop, we are likely to eventually arrive at a point where one dashboard will integrate all relevant information and provide high-level overviews of transactions, cashflows, outstanding invoices, tax return filings and funding eligibility.
- Speed – neobanks provide bank account setup within minutes, and traditional banks such as JP Morgan, Investec, and Marcus are following this trend. For businesses that need funding, Liberis can integrate with their bank accounts and dashboards to provide access to instant funding that can be retrieved within minutes.
- Super apps – PayPal and Revolut are developing omni-services within their existing ecosystems. For example, Revolut users can take out pet insurance and travel insurance as well as buy commodities and link to other bank accounts and credit card statements.
- Open finance – open finance provides the ability to aggregate user data from a range of financial apps in one place. Having all bank transaction, sales ledger and credit bureau data in a single application means customers can get a real-time view of their cash position, capture any emerging risks to their business and identify working capital gaps before they become critical.
- Digital working capital – small businesses have traditionally relied on bank overdrafts and/or personal credit cards to support their fluctuating working capital cycle. With the emergence of new lending technologies, banks, specialist lenders and fintechs are creating new frictionless finance products that use real-time data feeds to assess eligibility for a wider range of lending products such as term lending, invoice finance and asset finance.
- Embedded finance – the ability for financial service providers or specialist applications to embed propositions into other third-party channels means that small businesses can access a wider range of marketplace solutions, all within a banking app.