5 min read

The Solution to SMB Finance Woes?

Sarah Kocianski

A few weeks ago, I outlined the problems with the financial products that supposedly address small and medium sized businesses’ (SMBs) needs, and how they are chronically underserved by incumbent financial institutions (FIs) across all sectors. Since then, we’ve explored how things are changing in the SMB insurance space and delved into the developments in the areas of bank account opening, payments and loans in our podcasts. I’ve also been busy trying to discover, articulate and demonstrate what “best in class” in this industry looks like in my latest research report.

The long and the short of it is that financial products targeting SMBs are rarely designed with SMBs in mind. The term “product” is a massive clue towards how most providers think about the area — SMB offerings are just more things to sell in order to make money from a group, with little thought given to how they should be tailored for that group.
Most “SMB products” are either stripped down versions of corporate products, or overpriced versions of consumer ones.

What SMBs need…


is intelligent services. Rather than a disparate set of products, these firms and the people that run them need offerings that enable running a business, rather than doing admin, to become front and centre in their days. Intelligent services means intuitive solutions to specific needs. And the greatest need most SMBs owners and managers have, is help making the millions of decisions that comprise the day-to-day basis of running a successful business.

It’s all about data


Confident decision making rests, or should rest, on the decider’s ability to have all the pertinent data at their fingertips. When it comes to business critical decision making, I divide the relevant types of financial data into three groups: Banking Data, Accounting Data and Business Strategy. More often than not, SMBs do not have access to complete versions of the first two sets, and are therefore unable to create the third. The best SMB-focused financial services offerings available are working to plug the gaps in these data sets. That said, none are yet perfect examples of intelligent services.

What’s next?


There are a several upcoming events that should add impetus to fintechs’ and financial institutions’ drive to better serve SMBs. In the UK the government’s initiative to make it easier for these firms to submit tax returns, which rests heavily on digitising processes, will make it easier for fintechs and legacy players to create more intelligent services. Elsewhere, the growing open banking movement will offer a similar wealth of opportunities. As I said, there are no perfect intelligent financial services for SMBs out there — yet. In my latest report, I’ve compiled a list of principles to keep in mind if changing this situation is your goal. Find out what those principles are, along with my exploration of the plethora of finance-related problems suffered by SMBs. View real user-journeys from those breaking the mold when it comes to providing for these businesses, and hear detailed explanations of their services from their employees and founders. Oh, and gifs. Lots of gifs. To see Sarah’s latest report click here, you can find her writing on Forbes.com, 11:FS Pulse, and the 11:FS blog and hear her insights regularly on our podcasts.

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 Sarah Kocianski
About the author

Sarah Kocianski

Sarah is Head of Research at 11:FS, unearthing fascinating insights on diverse subjects throughout the finance and tech industries.

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