Do it yourself! Why vertical banking will profoundly change finance management for SMEs

We buy their products, we use their services and we eat at their restaurants almost every single day: small and medium enterprises, so-called SMEs. In Germany, SMEs represent the backbone of the German economy. According to the German Federal Statistical Office (Statistisches Bundesamt), there are around 2,5 Million of them in the country, which constitutes 99,3 % of all German Companies. Around 61 % of the country's population is working for them.

SMEs are becoming more and more digital due to the demands of their clients. On the other hand, they expect the same from financial institutions: online account opening, being able to handle their expenses digitally, getting a loan to cover unexpected expenses or to grow the business in a fully digital way. They expect a banking experience as simple as ordering household items from Amazon or selling stuff on ebay.

As a retail customer, they can already experience a lot of new apps, solutions or platforms to make banking as easy as 1-2-3. As a business owner, it’s the exact opposite.

For most banks, SMEs are the antithesis of a financial backbone. Many see SMEs as a time- (and therefore money) consuming pain point. Application forms as tedious as the day is long (and of course completely paper-based), exhausting business plan meetings with loan officers (naturally within branch opening hours, which conflicts with important business time for the entrepreneur!), and a million signatures and approvals later, the SME client may, or may not, get a loan or an account. But the experience was far from being smooth, streamlined, and digital, and the customer might get clammy hands whenever they walk by a bank branch for the next few weeks.

So what could be the solution?

Let the SMEs take care of their finances on their own!

In other words, SMEs should be given the possibility to use a holistic, vertical management of their financial needs, digital and simple.

How could this work?

By supporting them with the right platform: infinitec solutions

Cooperating partners of infinitec solutions can launch a state-of-the-art open banking  solution that allows SMEs to manage all their accounts in one place, handle all transactions in a convenient way, apply for a loan completely digitally with a plethora of different providers, and many more options.

Yes, it can get even better: infinitec solutions can work with any banking partner. And if an SME client wants to launch a new SME-focused digital bank, infinitec is already connected with finleap’s BaFin licensed solarisBank!

In order to serve the industry-specific needs of SMEs, different features can be developed or third-party products can be integrated: accounting tools, loan or factoring offerings from different players, or an interface to the point-of sale-system of retailers. Together with the deep tech know-how of the team, products can go live in just three months - as proved already with three different partners. In Italy, infinitec solutions built “Beesy” (CFO-as-a-service for freelancers) as a joint venture with Banca Sella, in the Netherlands the joint pilot “Dash” (CFO-as-a-service for SMEs) together with a dutch bank and in Germany “Finavi”, a proof of concept for end to end digital banking ecosystem for SMEs.

With the infinitec solutions platform, a catering group could build a new bank for restaurant owners, a car manufacturer could build a new loan option designed for car dealerships, and a doctor’s association could build a solution for physicians to manage their practice and their personal finances on one platform.

And of course, everything is digital, simple, and customized for the diverse vertical market. By reshaping finance together with experts from the different SME markets, infinitec solutions creates financial products to make an impact in people's daily business life. Financial products, that their users will finally love - and not just need.