Why integration is the key to providing seamless digital experiences in SME financial services
As consumers we have come to expect slick experiences in all aspects of our digital lives from social media to banking. But, in small business financial services, there is still room for dramatic improvement. As a small business owner one of the main criteria for buying in a new piece of software or selecting which service provider to go with is whether it will play nicely with your existing products and services.
An example of this would be when selecting an accounting system, bank account or payments service provider you want to know that data will flow from one platform to the other to save you from having to manually key in data or upload CSV files. These services have traditionally operated in isolation with their own web front end, apps or dashboards but there is increasing interoperability and even convergence in this space. Small business consumers demand it, and the big players have started to reach out of their traditional verticals to build a broader suite of financial services and digital products.
For example, Intuit are now offering QuickBooks customers loans and Commonwealth Bank have teamed up with Microsoft and KPMG to offer their customers a new accounting packages with integrated bank account, Wiise. We have already seen a series of high profile acquisitions with PayPal buying the mPOS specialist iZettle and RBS buying the micro-business cloud accounting app Freeagent. I am sure that won’t be the end of the M&A activity as the intensity of the small business engagement land grab increases.
As the availability of services that enable greater choice and comparison increase, the days of a bank being a one-stop shop and being able to loss-lead on one product which they know the customer needs before ripping them off on another product look to be over.
This flexibility for small businesses between providers is being powered by them being more open with their data. Some business owners do prefer the convenience and stability of accessing lots of financial services via the same provider, but if that provider is unable to offer the levels of service and value it has never been so easy for business owners to receive offers of funding, payments services and free applications from other providers by leveraging the data from their existing systems. The introduction and steady improvement of Open Banking will only accelerate these changes.
Ultimately business owners will still choose an accounting platform, bank account and payments provider to meet their specific needs within these areas, but as the boundaries between each of these erode, both in terms of data and the services they provide, the need for connected experiences is going to become increasingly vital for financial services providers.
Codat provide data infrastructure to enable seamless and connected digital financial experiences to small businesses. You can explore how we help customers in banking, payments, fintech and accounting at codat.io.