In Start with Why we explained why we believe that technology drives progress and business drives technology. We set out our mission: to provide the financial toolkit required for our customers to thrive in the digital age. In this blog, we explain why we believe that mission starts with a business bank account that works, allowing business owners to spend more time running their business.
Getting down to business bank accounts
At Intergiro, we understand that no two businesses are the same, but we also know that many traditional banks fail to recognise this fundamental point. Traditionally, financial institutions have focused on market segmentation (by business size, revenue, industry) in an effort to ‘understand’ their customers. This approach, however, often results in financial service providers developing solutions which fail to address businesses individual needs. Indeed, according to Adaptive Lab, 59% of businesses see their current business bank account offerings as ‘one size fits all’, with little to no tailoring for their individual business needs.
Corporates also have very different needs to individuals. This may seem obvious, but it has been ignored by many financial services providers. For example, corporates don’t save money, they make much larger transactions, they need multiple cards to transact and they need more dynamic credit than individuals. This requires a completely different banking approach, not a business banking app tacked onto a bank built to serve individuals.
At Intergiro we want to take a different path. We start by trying to understand the business needs faced by our customers before then trying to tackle the challenge of developing bank account solutions which address their unique needs.
Business bank accounts for digital businesses
One way to help solve this problem is to use technology to deliver personalised solutions. That might mean offering different pricing packages based on each business’ specific needs, or it might be a personalised onboarding service, dealing with real people who can answer questions quickly and accurately and make sure you’re up and running with a minimal amount of fuss. By focussing exclusively on building services that work for businesses, we believe we stand a much better chance of building a toolkit which works for a wide range of 21st century businesses and which allows innovators to focus on their own goals without worrying about financial services.
This is a challenge, but it’s one that’s certainly worth solving. In the UK, arguably Europe’s Fintech hub, there are more than five million SMEs. Around the world, there are around 150 million micro-businesses, let alone the number of larger businesses that could be better served, at a lower cost, by a digital solution for their banking.
Business banking heavyweights
That’s also why it’s so surprising that no one has built a business bank account that truly works for businesses. For their part, big banks have largely ignored the needs of their business customers when it comes to digital services, focussing instead on delivering a greater level of digital service to their more homogeneous consumer or retail customers. By shying away from the complexity of delivering business banking services in an automated, modern fashion, banks have left business customers less delighted with their digital offering than individual customers.
And, the problem is exacerbated by the fact that banks make money from lending out their customer’s deposits. Naturally, this leads banks to chase the biggest clients with the biggest deposits, reserving a personalised relationship-based model for those clients alone. Add in the complexity brought about by money laundering risk, which multiplies with the size of business and a manual approach to delivering client relationships at the expense of automation and modernisation seems to make more sense.
Well, it makes sense for banks like those, but not to FinTechs like us. We believe it’s unacceptable for European small business owners to wait months to open an account, grappling with mountains of paperwork and face-to-face meetings with bank managers. The consumer banking model has been revolutionised by the internet, but the business banking has been left behind.
The business bank account drought
This business banking drought has a huge impact on hard working businesses. We deal with businesses on a daily basis which struggle to access the banking services they need, because of the industry they work in or their lack of expertise in negotiating the complexities of business banking. We try to help any business which comes our way and our stringent background checks are made with a positive approach - we look for reasons to work with you, not reasons to turn you away.
This is fundamentally what inspired us to start Intergiro. Our fundamental belief is that businesses are the most important factor in building a better world. Governments and charities seek to do good but are hampered by borders and lack of investment and innovation. Only business can provide the positive impact that is required to build a better future. Our mission is to support those businesses by designing the modern financial services they need to succeed.
After all, be it a sole trader, an entrepreneur running a small business, or even the futuristic designs of the X Lab at Google, innovations that enable progress are generated by businesses. If a business cannot access basic banking then it cannot innovate.
Whilst banks have the potential to change this through their investment power they are hampered by legacy systems which block innovation.
Whereas many Fintechs have the technological nous and the spirit of innovation, they are perhaps daunted by the scale of the investment and ambition required to tackle the complexity of business banking.
Clients, banks and Fintechs alike have continued to settle for and settle into the traditional model of banking.
So it’s time for something new.