In a live webinar with the SME Finance Forum, Strands’ Head of Product, Claudio Cungi, and Novo Banco’s Chief Digital Officer, João Dias, addressed the latest trends in business financial management solutions.

It is crucial for small businesses to be able to use an instrument simplifying money management and aggregating their entire financial picture on one platform. Banks are taking the lead in providing such solutions, empowering SMEs to take control of their financial future and leveraging data to provide a better assessment to SME owners.

This year, SME Finance Forum launched a new initiative, the Member Spotlight, to provide its member institutions a stage to share knowledge and experience, as well as specific products and services they consider relevant and useful for the global community of SME financiers.  Strands took part in the second edition of this new initiative, with Claudio Cungi, Strands’ Head of Product, explaining how the company has incorporated artificial intelligence and machine learning in its products.

As COVID-19 affects the liquidity needs, businesses need to understand where, how, and whether they should get financed. Accordingly, Claudio highlighted how Strands BFM can benefit its customers, especially small businesses, merchants, freelancers, and tax accountants. At Strands, we aim to present a simple and straightforward overview of one’s business performance. By monitoring the past transactions, users can plan for the future at the same time. Using this tool ensures that customers would eventually understand the generation and absorption of sources of income and expenses, and then take care of their finances. But the advantage of utilizing Strands BFM is not unidirectional. For mobile banks, using this easy interaction increases the quantity and quality of the dataset. By categorizing the data and knowing clients in a better way, banks can also enhance cross-selling and attract new customers.

 

Member Spotlight #2 with Strands and Novo Banco from SME Finance Forum on Vimeo.

 

João Dias, the Chief Digital Officer at Novo Banco, further illustrated the practical application of Strands’ technology by explaining how it has assisted their business and supported their SME clients. Novo Banco is a Portuguese banking company, created in 2014 to rescue assets and liabilities of Banco Espírito Santo. It currently specializes in retail and investment banking, insurance, asset management, and venture capital.

Digitalization has been playing a significant role for Novo Banco to face economic challenges and adapt to technological developments. By incorporating artificial intelligence, like Strands’ tool, Novo Banco aims to become a better bank for its customers. João indicated that Novo Banco launched an online paperless credit that allows small businesses to have the cash in their accounts in less than 48 hours, which fulfills customers’ short-term treasury needs and enables them, for example, to pay VAT in time.

By interacting with Novo Banco through internet banking, customers now can deeply aggregate their accounts and perceive their whole financial life. This model functions as a one-stop-shop for payment initiations as long as customers initiate payments from the bank accounts that they have aggregated there. Additionally, the automatic categorization of revenue and expenses gives customers an instant view of their business status. João also mentioned, like Claudio, the prediction function of the financial calendar. Based on customers’ past spending patterns, the financial calendar automatically shows the dates and categories of future payments.

Explaining why Novo Banco has chosen Strands, João claimed that they wanted to be the first in the market with this solution, offering their customers account aggregation and neat analytics about their financial life. Novo Banco is now partnering up with Strands in the BFM and the PFM, covering both its online system and the mobile app.Digitalization will not only enable banks to serve SMEs timely and accurately, but also educate entrepreneurs on how to use the tool to monitor and predict their financial status in the long run. Give a man a fish, and you feed him for a day; show him how to catch fish, and you feed him for a lifetime.

 

A version of this post was originally published on: https://www.smefinanceforum.org/post/how-to-rule-the-sme-banking-world. The article has been edited for brevity.