There are some 5.5 million SMEs in the UK. They are the lifeblood of the economy, covering 51% of all private sector turnover in the UK, according to a report by professional services firm EY. But much of their time is wasted using outdated banking services.
On average, businesses lose a staggering 48 days per year on their banking and admin, with over a quarter of owners spending between one and four hours per week managing their expenses. Gloomy statistics flag up an urgency for the UK business banking landscape to adapt to ever-evolving customer demand more than ever before – or risk losing business.
"Traditional high street banks haven't really offered a proposition created specifically for SMEs. They tend to offer a combination of retail and corporate products that aren’t fit for purpose and don’t give SMEs what they need," says Oliver Prill, CEO of challenger bank Tide.
The so-called "Big Four" – Barclays, Lloyds, HSBC and the Royal Bank of Scotland (RBS) – may still dominate the market, but a swath of innovative FinTech banks have spotted an opportunity to do things differently. They now offer more tailored financial services with the customer firmly in mind.
With businesses in need of an ability to deliver loans quickly, access information without calling the bank, make faster bill payments to avoid late fees and use mobile payment functionality, a number of start-ups are stepping up to offer just that.
Traditionally, these have been major pain points for entrepreneurs. However, Monzo, Starling, Revolut, and Tide are just a few of the start-ups changing the way businesses bank. Emerging from the UK's rising digital economy, they aren't constrained by outdated infrastructure and offer a far more customer-centric approach, utilising advanced technology to deliver safe transactions, minimise administration time and make the customer feel valued.
Listen to what Tide’s Chief Operating & Product Officer and former Chief Operating Officer at Revolut, Laurence Krieger, has to say about Tide’s customer-centric approach:
Tide focuses on providing connected products to help business owners do their banking and business admin in one place. Members can manage their expenses and invoices, apply for credit, categorise transactions, and push data through to their accountancy software, saving both time and money.
SMEs are diverse and have very different needs, and therefore something that is created without an understanding of those needs can be very frustrating for business owners,"
In addition to the lack of bespoke products, the time it takes to open a business account with high street banks is a huge pain point. It can take between two weeks and a month, to get an account opened. But with Tide, businesses can open an account in a matter of minutes.
"Our account holders can send invoices on the go, via the app, can manage their expenses as they go, and get everything pushed automatically into their accountancy software. This means they can spend longer doing what they love: growing their businesses," says Prill. Clearly, it pays to be different.
Looking to switch to a start-up bank? Tide Business Banking is offering a special deal for Workspace customers. Get a year of free bank transfers here. Open an account and use the code WORKSPACE to claim your offer.
If you want to read more about the new businesses disrupting the banking landscape, check out New Banks on the Block [ADD LINK] from our latest issue of homeWORK magazine. Read online or pick up a copy from the lobby area of your local Workspace centre.