RFI Global Business Banking Summit 2019: The age of branch banking is over

It’s rare for such a small event to have so many relevant names in the fintech industry. The RFI Global Business Banking Summit, taking place on 27 February 2019 in London, didn’t host more than 250 people, but made sure every single one of them counted.

“Money” wasn’t the buzzword of the day.

The event touted its topics around “An awakened focused on business customers”, and how the many different tech and financial services companies have realised the underserved market that is business banking. Everybody seems to have woke up at the same time.

The event’s impressive list of speakers included Claurelle Schoepke, general manager, Amazon Lending EU; Oliver Prill, CEO of Tide; Melinda Roylett, head of Europe, Square; Andrea Dunlop, CEO acquiring and card solutions, Paysafe; among many others.

“Business banking is undoubtedly growing, and we see it in how we are seeing more and more digital alternatives appearing in direct competition with the big established institutions,” Prill tells FinTech Futures. “We’re reaping the benefits of digital banking taking over the business side, as our business itself reached the point where we can meet those demands”.

When asked about his firm’s competition, he makes it clear that digital options for businesses are a minority in the market, with little to no competition among them. The traditional institutions, which hold the vast majority of the market, lack many ways to cater for the digital needs of big businesses and SMEs.

Together for victory

“Tide caters for SMEs, which are not your traditional corporates, but aren’t consumers either. As SMEs come from all types of industries, it is a very heterogenous group, and it can be tricky to cover all bases for all of them,” adds Prill. “Thankfully, we have got out marketplace, the platform by which we can plug excellent products and services that SMEs can access according to their needs.”

The idea of a marketplace, which has been popular in consumer banking, is one of Tide’s strong points. As fintechs get readier and readier to get their products out in the market, more and more banks and other financial institutions realise they do need them to remain afloat. It’s the conversation we have been having for the past year, but now fintechs like Capify and Crediwire go to events like these finding big names, and vice versa, and establish partnerships.

An example of these partnerships is Tide’s partnership with Iwoca, whose risk engine makes instant lending decisions. This allows it to assess the millions of SMEs currently neglected by mainstream banks and lenders.

Speaking with a member of the audience, he remarked how now, more than ever, events like RFI’s are a networking opportunity to kickstart conversations aimed at open banking partnerships like these.

When the problems come

“Only 16% of SMEs demand a brand. We can see the potential that digital banks have in this area, clearly,” Prill says.

However, for SMEs and corporates, it is extremely rare that they have more than one bank account, as they want to centralise liquidity and expenses. This means that banks are fighting for customers more than on the consumer side, where they can dip their toes in several bank without having to commit to either.

It is clear that these banks have much to offer to their clients, but none of that is possible without the use of data. Particularly when it comes to businesses, this amounts to transaction data, payroll data, supply chain data, accounting data… In summary, a lot of different data.

Many of the fintechs and financial institutions can make use of all this for better services, but one of the important questions posed throughout the event is not only what to do with that data, but how to get it. This means, how do we get consent from clients, and how important is it? Very, it turns out.

Andy Booth, MD business banking, Barclays, addresses this point perfectly: “Of course, we need to inspire trust to our clients, but clients also need to feel that they are receiving a fair value in exchange for our use of their data. And perhaps more importantly, nowadays, we need to be transparent with what to do with that data, and make sure the client always has control over it.”

Sean Hunter, CIO at Oaknorth, spoke at a panel about the current importance of technologies around big data, artificial intelligence (AI), and regtech. And understandably, as with new regulatory demands (and possibilities), it becomes clearer and clearer that those being able to leverage data effectively will undoubtedly attract consumers’ attention and loyalty.

Lastly, Prill highlights the importance of BCR’s Capability and Innovation Fund in its potential to disrupt the status quo and the industry. This will clearly raise the standards for digital business banking, and with one big grant to give away, everybody remains at the edge of their seat.