Clara Nobre from Wise talks about small business banking in fintech

As product manager for Wise Business, Clara Nobre manages Wise’s dedicated products for small and medium-sized businesses. Before joining Wise, Clara worked for Vodafone, Hive and Portugal Telecom. Wise Business allows users to pay employees, get paid and manage their cash flow abroad. Today, Wise moves £6 billion a month and has 3,000 employees worldwide. From digital payments to frictionless lending, we take a look at the latest trends in small business banking – and how it affects the venue.

Do small businesses have specific banking needs? And if so, how does fintech meet these needs?

Yes. Small companies do not have the resources of larger companies – neither in terms of employees nor money. For this reason, they need banking services that are easy to use, efficient and affordable. Unfortunately, those offered by banks tend to be bureaucratic, slow and expensive. Fintechs can help. Fintechs are able to specialize and bring their culture of innovation to small businesses.

Take Wise Business. We know how broken existing international banking services are, so we make ours as fast, transparent and affordable as possible. We also focus on real business bugbears. We know small businesses hate having to open a local bank account when entering a new market, so we provide them with local account details that save them this hassle.

How can an SME be sure they are choosing the right bank to handle their business needs? What should they look for when choosing a bank?

Understandably, companies are careful with their money. Fintechs are young companies, their brands are not as well known – while banks have decades, centuries of heritage, even if their services are lacking. This leads to caution – no one got fired for buying IBM, I doubt anyone got fired for choosing a high street bank either.

To overcome this, businesses should determine what their specific banking needs are. Fintechs specialize, so a business can find one that really fits their specific problems. And then there are the other routine checks they can do, like checking NPS, talking to other customers and so on.

Name three leading SME banking trends that are disrupting the space

The disruption of international banking. Companies are becoming increasingly international, so the importance of international banking services is increasing. Nevertheless, the banks’ services are lacking. They are slow, expensive, clogged with bureaucracy.

To learn more about the issue, we recently commissioned YouGov to survey 5,000 SMEs worldwide. The results showed that of the businesses that were deterred from operating abroad, the most cited reason for being deterred was the stress of international banking, which scored higher than tariffs, regulations or access to finance. Of those businesses that are already abroad, international banking ranked as the main factor that makes doing business more difficult. It is ripe for change – and at Wise Business we are trying to do something better.

Established banks creating new brands for SME banking. The banks know that their SME services are lacking, so they start again in practice. We’re seeing a number of high street banks launch brand new SME banking brands, brands you didn’t know were owned by more established banks. It’s a very interesting trend and could really work if they manage to combine a fintech’s culture with a bank’s scale.

[Another critical element is] SMEs increase trust in and use of fintech. The research also showed that of the SMEs operating abroad, 42% now use fintechs or digital banks. This number is only going to increase as fintech becomes more established and SMEs will rely on them with more parts of their banking business.

What does the future of small business banking look like to you?

Unless banks improve their services – either by building their own or bringing in partners through APIs and third-party services – I think they will lose a lot of small business customers. Already we see a large number of brilliant fintechs offering great products and services. These will become better known and used more, and the banks will lose customers.