BankiFi, a leading embedded banking platform, has launched a campaign to challenge three common myths surrounding digital-only neobanks. The company aims to dispel these misconceptions in order to shed light on the benefits available to small-to-medium sized enterprises (SMEs) when partnering with customer-centric banks.
Firstly, BankiFi rejects the belief that digital-only neobanks have conquered the SME market. Despite claims made by these neobanks regarding market share, there is little evidence to suggest that they have overtaken traditional financial institutions in terms of serving as primary business accounts for SMEs. While neobanks like Monzo and Starling boast impressive numbers, it remains unclear whether these accounts are being used as primary or secondary accounts. Additionally, SMEs often turn to digital challenger banks as supplementary services rather than relying solely on these neobanks.
The second myth BankiFi challenges is the notion that regulatory hurdles have hindered the growth of digital-only neobanks. While some argue that banking regulations have slowed down neobank growth, it is important to recognize the importance of such regulations in protecting the financial interests of individuals and businesses. Lighter regulation should not come at the expense of risk to businesses and livelihoods. The UK’s regulatory framework is esteemed globally, and it is crucial that digital-only neobanks are subject to the same requirements as traditional financial institutions.
Lastly, BankiFi disputes the idea that SMEs have diverse banking preferences. While SMEs vary in their size and structure, they often share the common struggle of dealing with late payments. In the UK, SMEs are owed an average of £250,000 in late payments, while in the US, the figure amounts to $304,066 on average according to QuickBooks. With many SMEs operating with fewer than 15 cash buffer days, the scale of this issue becomes evident.
Mark Hartley, CEO and Founder of BankiFi, emphasizes that SMEs are not receiving sufficient value from digital-only neobanks and require more support. He encourages digital-only neobanks to meet the expectations of SMEs by combining digital experiences with human-to-human interactions. Offering a mix of physical and digital experiences is what SME customers desire.
BankiFi’s solution focuses on helping SMEs get paid quickly by white-labeling its service through banking relationships. On average, SMEs using BankiFi’s solution receive payment within one to two days after the creation of an invoice. This ability to expedite payments can address cashflow concerns that often plague businesses, providing SMEs with more control over their finances.
BankiFi’s campaign to debunk these myths aligns with its commitment to improving banking options for SMEs. By creating awareness around the limitations of digital-only neobanks and the benefits of customer-focused approaches, BankiFi hopes to drive change in the industry. The recognition of BankiFi as a key player in the small business banking sector and the release of its whitepaper earlier this year further highlight the company’s dedication to empowering SMEs.
In conclusion, BankiFi’s campaign seeks to rectify common misconceptions surrounding digital-only neobanks. By challenging the belief that these neobanks dominate the SME market, highlighting the importance of regulatory requirements, and acknowledging the shared banking needs of SMEs, BankiFi aims to promote more effective support for SME partners. With SMEs facing significant challenges related to late payments, BankiFi’s solution provides a valuable tool to expedite payments and strengthen the financial position of these businesses. Emphasizing the need for collaborative efforts between digital-only neobanks and SMEs, BankiFi is driving a conversation that could lead to improved banking experiences for SMEs in the future.
