By Kyla Reed - April 17, 2024
Vibrant Credit Union: Breaking Industry Barriers with Embedded Lending
Growing competition is forcing banks and credit unions to rethink their revenue strategies. Read how one credit union used embedded
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Retail Banking
Retail Banking Overview
Gain new customers by creating experiences and products quickly and easily
Account Opening
Create journeys powering customer acquisition
Personal Lending
Design and launch personalized products quickly to meet customer needs
Mortgage Automation
Build tailored mortgage offers to win new customers
Small Business Banking
Small Business Banking Overview
Grow your small business customer base
Account Opening
Engage and onboard small businesses using frictionless digital journeys
Small Business Lending
Create relevant loan products to meet the specific needs of different business segments
General Insurance
General Insurance
Meet the need for new forms of cover and high-quality digital experiences
Small Business Insurance
Create personalized propositions that meet the unique needs of small businesses
Pet Insurance
Increase share of wallet with cover customers love as much as their pets
Embedded Finance
BNPL and Embedded Lending
Deliver lending products directly to where they are needed
Resource Center
Get insights from the latest customer case studies, whitepapers, webinars, and more
Customer Case Studies
Learn what our global customers are saying about the value of FintechOS
Platform Documentation
Comprehensive documentation for the FintechOS platform including release notes, APIs, and SDKs
SMEs are an important source of business for financial services players. Each year, they generate $850 billion globally in revenue for banks. That accounts for 20% of worldwide banking revenues.
Yet, SMEs often say the products and services offered by banks don’t meet their expectations or needs. Across Europe, accessing finance is more difficult for SMEs than for large companies: more SMEs face obstacles, are discouraged from applying for a loan and receive rejections.
In the UK, for example, more than 50% of SMEs apply to only one loan provider because of the “hassle” and time associated with the application journey.
When it comes to onboarding, verification has been singled out as one of the biggest pain points for SMEs: 84% say they’ve had a bad experience of KYC.
A FintechOS research on the state of the SME banking industry found at least four reasons why SMEs feel their expectations and needs aren’t met:
Overlooked and underserved
Poor product fit
Complexity and friction
Legacy systems blocking change
Accessing Finance in Focus – Why Is It So Difficult?
With complex applications and long delays, applying for loans can be a major drain on SME’s resources. And it’s these kinds of barriers that are driving them towards new, customer-centric digital players.
In Europe, more SMEs face obstacles to getting a loan than large companies and 8% say accessing finance is the most important issue facing their business, double the figure for larger enterprises.
Is poor product fit to blame?
When it comes to applying for a loan, product fit is closely linked to an SME’s chances of approval.
Without a tailored offering, an SME is forced to shoehorn itself into what’s available, even though it might look more like a retail or corporate product.
What does it mean in practice?
Going through an application process that hasn’t been designed with them in mind and lower chances of approval. In short, complexity, friction and delays (to be continued).
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This article is part of a series of FintechOS articles on SME banking. For more findings from our whitepaper, ➡️download from here: https://bit.ly/2z0FpGT. Stay tuned for more (to be continued).
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References:
McKinsey, https://www.mckinsey.com/business-functions/risk/our-insights/the-lending-revolution-how-digital-credit-is-changing-banks-from-the-inside; BVA BDRC, March 2019, SME Finance Monitor; https://internationalbanker.com/technology/business-banking-cannot-be-disrupted-without-digital-in-onboarding/; International Finance Corporation (World Bank Group), 2019, Banking on SMEs: Trends and Challenges; International Finance Magazine, 2019, ‘Digitising the banking experience for SMEs’; ECB, Survey on the Access to Finance of Enterprises in the euro area – April to September 2019
About this whitepaper:
We wrote this whitepaper to explain the why and how of the four steps we be believe are critical for future success. We’ve gathered the latest research on the state of the SME banking industry and combined it with insights from SME banking leaders spearheading digital change in their organisations. The result is a clear-eyed view of where the industry is at this moment and the actions banking leaders should take to win in the digital future.
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This article is part of a series of FintechOS articles on SME banking. For more findings on this industry, ➡️download our whitepaper from here: https://bit.ly/2z0FpGT
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On the same topic:
How to Unlock the Potential of SMEs
Underserved SMEs: 4 Steps for Banks to Tap the Market
FintechOS is the global leader in fintech enablement, on a mission to make fintech innovation available to every company. As the world grows increasingly complex, FintechOS strives to simplify and accelerate financial technology so anyone can build, launch, service, and expand new products in weeks, not months or years. The FintechOS platform empowers banks, credit unions, and insurers of any size to grow revenue, lower operating costs, and achieve a faster time to value without dependency on core infrastructure and costly tech talent. Headquartered in New York and London, FintechOS has partnered with some of the world’s best brands, including Groupe Société Générale, Admiral Group, Oney, eMag, Deloitte, EY, and PWC.