Blog: Bridging the SME fintech gap

According to a PwC’s March 2016 Global Fintech Report, clients of financial services firms are becoming accustomed to the digital experiences offered by the likes of Apple, Google and Facebook. And SMEs are leading this charge, writes Richard Poulton.

According to a PwC’s March 2016 Global Fintech Report, clients of financial services firms are becoming accustomed to the digital experiences offered by the likes of Apple, Google and Facebook. And SMEs are leading this charge, writes Richard Poulton.

Increasingly, they expect a similar convenient offer and experience from their banking, lending and foreign exchange providers.

Small and medium-sized enterprises (SMEs) in particular are demanding tailored, cost-effective and convenient solutions for their finances.

SMEs often lack the resources to employ a dedicated team to manage the expanse of financial activity – from marketplace lending, e-commerce finance, invoice finance, online supply chain to currency risk management and trade.

Fintech has the ability to bridge this gap and be the game-changer that SMEs need to appropriately and effectively manage their finances.

The current environment presents a wealth of opportunity for more traditional financial services firms to transform into high-growth players in the fintech field.

Now is the time to make wholesale changes to technology, systems and the overall ethos of these firms – or get left behind.

Change is always challenging, but worth it. For companies looking to transform into the fintech space, here are my top five tips for a smooth transition.

Empower rather than micro manage

Don’t be afraid of hiring staff who could do your job. Make sure you go to market with the best people in the industry and empower them to drive the evolution of the business.

Work collaboratively to define your core values and the language that characterises your business - consistently exercise these values and use this language internally and externally.

Foster a coaching culture

Understand when it’s time to transition from a small business mentality to a fintech culture and put in place the training and development necessary to facilitate this move.

It is important to bring staff on the transition journey and to invest in consultative sales training, daily strategy meetings and change compensation packages to fix the “us and them” culture.

After the initial transformation, continue to have weekly training sessions to upskill staff, ensuring they receive a deep and continuous education on the drivers of the markets you work in and the fintech space.

A successful fintech company’s transition never ends, so it is important you and your staff are adaptable.

See yourself as an extension of the client’s business

Aim to have a deep understanding of your clients’ business goals and pain points, equipping your staff to develop solutions that concentrate specifically on business outcomes, rather on transactions in isolation.

Get on the road and visit your clients to see the moving parts of their business operations and understand where you could provide solutions.
By behaving as a trusted business partner rather than just a service provider, you will elevate the client experience and sense of value, as well as morale amongst your staff.

Know where your client is heading before they do

Over the years I’ve learned that it’s not good enough to understand client behaviour and business trajectories after the fact.

Rather, to satisfy and retain clients, you must anticipate where they are heading and use data proactively to understand how the relationship is tracking.

This is also vital for staying relevant within the ever-changing fintech space.

Look ahead, but don’t forget where you’ve come from

It’s imperative to create “stickiness” with clients by taking them in new directions in line with their changing needs through technology and product innovations. As the education and sophistication of SME clients grows, you need to keep pace their changing needs and environments.

While this forward momentum is a necessity, you cannot forget where you came from and must continue to have the fundamental requirements of clients’ front of mind.

Fintech solutions cannot be a diversion from your service proposition, but should deliver more value to clients through removing manual processes.

Richard Poulton is the general manager, Asia Pacific, for risk management consultant AFEX.

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