SMEs need efficient banking solutions that are powered by technology. Manish Mrigank, Product Leader at Tide, has 15+ years of experience in Product, Growth, and Customer Experience. At Tide, he helped SME sector for financial services needs and helped them grow across UK, India and other European countries. The Catalyst engaged in a detailed conversation with him to understand how Tide is enhancing banking experiences for SMEs, utilizing technology to curate personalized features for customers, addressing bias in AI, and successfully expanding into new geographies.
What are the biggest challenges SMEs face in banking today, and how does technology address these issues?
SMEs face a lot of challenges in banking due to their size, complexity, and lack of information. Technology is playing a critical role in addressing some of these issues. These are top five challenges faced by SMEs in today’s world:
- Banking Services and Transaction fees
SMEs need to pay high fees to maintain business account, high transaction fee and foreign exchange fee. Digital/Neo banks such as Revolut, Tide, Monzo etc have used technology to provide free/low cost business account, low transaction fee and low cost international payments. Payment platforms such as Stripe, Square etc have made the payments integrated and seamless, and also have made international payments easier and faster. - Regulatory and Security Compliance
Keeping up with local and international laws can be daunting task for SMEs. Technology platforms such as Onfido etc help SMEs to be in compliant with regulatory bodies automatically. Other technology platforms help them to be in tax compliance or even other compliances such as KYC (Know your customer) and AML (Anti-money laundering). - Fraud detection
Payment fraud, cyber fraud, data breach are the most important threats to the SMEs business operation. Latest technology innovation such as AI-ML has enabled the advance fraud detection techniques. Different cyber security methods such as Multi-factor authentication, encryption has helped reduce the cyber security threats. - Financial Services
SMEs operations depend on lot of financial services which are essential for business but are expensive such as Invoicing, Expense management, Tax management, Payroll, Cash flow management. Technology platforms are able to provide these services to SMEs, so they can save time, avoid error and focus on their main business instead of these operational activities. - Credit and Financing
Last, but the most important challenge for SMEs is access to financing due to their limited credit history, lack of collateral. Lot of new fintech companies has been able to look beyond traditional data points ( cash flow, transaction history) to check the credit worthiness and able to provide financing to SMEs. AI-ML has helped a great deal in achieving the new model for credit scoring and lending decision.
Please share some innovative products or services for SMEs that were made possible through technology?
Technology has helped in creating various innovative products and services that have helped SMEs to make business more efficient, enhance customer experiences and accelerate growth. Here are some examples of such innovations:
- Digital Banking and Payment
Digital Bank and Neobanks such as Revolut, Monzo, Tide have provided low-cost, user-friendly banking services to SMEs. They offer features like multi-currency accounts, faster international money transfers, and automated bookkeeping along with integrated payment solution such as Stripe, paypal, square. These provide online payment, in-store or POS payments in various currencies. - Business Operation Softwares
Cloud accounting softwares such as Quickbooks, Xero, Freshbooks helps SMEs to manage their accounting and automate the invoicing, expense, payroll and financial reporting processes.
Supply chain management softwares such as Netsuite, Quickcommerce provide real-time inventory management solution, demand forecast, and supply chain logistics analytics solution to improve efficiency.
Business intelligence tools such as Tableau, Power BI enable to analyse large volume of data from different systems (CRM, Sales, Marketing) and provide actionable insights.
Documentation software such as Docusign provide way to contract management, approval process using digital signature.
Workforce Management Softwares
Human Resource and Payroll Softwares such as Gusto, BambooHR provides Hire to Retire solution including Payroll, Benefits and helps SMEs to manage their workforce without any overhead. Platforms such as Upwork provides on-demand workforce for gig work.
Asana, Trello, Monday provided solutions to manager projects, task, Product backlog.
Slack, Zoom, Notion, Teams etc provide way for collaboration and communication across teams spread across geographies.
AI-Powered Customer Engagement
AI-ML powered platforms such as Intercom, Kustomer, Zendesk etc provide multi-channel customer service which improves customer satisfaction as well improve customer service agent efficiency.
Marketing platforms such as HubSpot, Mailchimp uses AI-ML to automate the customer outreach through all channels and create personalized content for targeted customer segments.
E-commerce platforms such as shopify, wix enables SMEs to be present online and reach to customers directly without any intermediary.
Highlight the use of advanced technology and data-driven insights at Tide to create innovative features for SMEs?
Tide provides business banking services to SMEs using latest technology and data-driven insights. Starting from helping with company registration to providing business banking account, International payment, Invoicing, Account integration, Expense cards to Business loan- all these feature are enhanced with latest tech stack and AI-ML powered and takes care of all aspects of business, so SMEs can focus on their own business. Some of the features which are powered by latest technology and AI-ML are:
- In-app Invoices : Generate in-app invoice, send them to customers directly and map the payment to invoice reducing the overtime time
- Expense Cards: Eliminate manual expense claims by making direct purchase, matching transaction with receipt, expense categorization, digital receipt, Spending monitoring
- Accounting software: Personalized invoice, tax compliance, automated bookkeeping, Synch business transaction by integration with platforms like Xero, quickbooks, able to categorize expenses, reconcile bank statements, and generate financial reports.
- Business Loan: Credit scoring using AI-ML models, Loan availability, quick loan transfer
Data Driven Insights:
- Real time Analysis: Tide platform is powered with AI-ML and generative AI. The platform is synched with all data touchpoints, CRM, Sales, Finance. It leverages data points across the platform and provide real time insight into spending pattern, invoicing, payments and financial reports, these insights help SMEs to track their profitability, predict cash flow needs, and identify areas for improvement.
- Personalized Recommendation: Tide’s platform leverages data analytics to deliver personalized financial recommendations and real-time alerts to business owners. Based on spending history, business goals, and cash flow, Tide suggests ways to optimize business financials, such as when to delay payments or adjust budgets.
- Predictive Analysis: Using predictive analytics, Tide helps SMEs anticipate financial challenges before they arise by sending timely alerts related to cash flow dips, upcoming expenses, and potential late payments. This enables business owners to take proactive measures to safeguard their finances.
- Real Time Dashboard and Reports: Tide’s dashboard provides SMEs with a holistic view of their financial health in real-time. It integrates various data points, such as income, expenses, liabilities, and cash flow, into an easy-to-understand interface.
The platform generates key performance indicators (KPIs) and visual reports, which help SMEs assess their profitability, liquidity, and overall financial status. These insights allow business owners to monitor performance against targets and make informed decisions about their business strategy.
How do AI-driven insights help SMEs make better financial decisions, particularly in unpredictable markets?
AI-driven insights are transforming the way SMEs make financial decisions, especially in unpredictable and volatile markets. By leveraging artificial intelligence and data analytics, SMEs can gain access to valuable, real-time information that allows them to respond more effectively to the changes in the market. Here’s how AI-driven insights can help SMEs make better financial decisions:
- Real-Time Monitoring: AI can continuously monitor financial data, such as cash flow, expenses, revenue, and profit margins, in real-time. It can analyse patterns in business transactions and highlight any fluctuations or anomalies that may indicate emerging financial risks. By receiving instant alerts, SMEs can take proactive measures to manage risks or capitalize on opportunities.
- Predictive Analytics: AI-driven predictive analytics can analyse historical financial data and predict future cash flow trends based on patterns, seasonality, and external factors (e.g., market conditions, industry shifts). This enables business owners to take proactive measures to safeguard their finances.
- Expense Analysis and Cost Optimization: AI tools can categorize and analyse expenses, identify cost-saving opportunities, and suggest areas where spending can be optimized. SMEs use these insights to identify inefficiencies and unnecessary expenses, helping them make smarter purchasing decisions and optimize their budgets.
- Customer Behaviour Analysis: AI can analyse customer purchasing behaviours, preferences, and interactions to segment customers more effectively. It identifies patterns in buying behaviour, helping businesses predict future sales trends and personalize marketing campaigns. SMEs can adjust their product offerings, marketing efforts, and sales strategies to better align with customer needs, ensuring they maintain customer loyalty and market share.
- Market Analysis: AI can process vast amounts of data from various sources, including industry reports, social media, and global news, to identify emerging market trends. Machine learning models can analyze historical data and external signals to forecast future market behavior, such as demand shifts or economic disruptions.
- Pricing Analysis: AI algorithms can analyze external factors such as market demand, competitor pricing, and customer preferences to recommend optimal pricing strategies. It can also predict how price adjustments could affect revenue, allowing businesses to test different pricing models in a risk-free, simulated environment. SMEs can adapt to changing conditions by adjusting prices dynamically based on real-time data, helping them maintain profitability without losing customers. This is particularly important when facing fluctuating demand or when entering new markets with price-sensitive customers.
How to ensure that the AI-ML models remain transparent and unbiased when dealing with diverse SME clients?
While implementing the AI-ML solution, it is important to keep the AI-ML model transparent and unbiased especially around data privacy and ethics. Given that AI systems can impact financial decisions, customer relationships, and business growth, these are five principles which can be used to ensure transparency and unbiases:
- AI Hallucination: AI output should be considered only as source of input and not source of truth. To build the trust and accountability, it is useful to incorporate Human-in-the-loop as additional layer of check before any critical decision to align with ethical standards.
- Transparency: Stakeholders should be clearly explained about the data being used and how the decision is being made. There should be clear communication the Model output is driven based on quality of input and training data. For example, if an SME is denied a loan or receives an unfavourable recommendation, there should be clear explanation on the factors influencing that decision. (e.g., cash flow history, industry trends)
- Data Privacy: Adhere to all data privacy laws and regulatory frameworks such as GDPR(General Data Protection Regulation), EU AI Act, IP rights etc. Also, educate employees how data needs to be collected, stored, used etc
- Governing Principles: Maintain company wide governing principles before you start implementing AI-ML solutions.
- Feedback Loop: There should be regular auditing and monitoring of data, model and output to evaluate the results and feedback needs to be provided back to improve the data quality and model algorithm, which will improve the decision making process for transparency and unbiases.
What strategies are best for delivering a seamless experience for SMEs while expanding into new geographies?
To succeed in global expansion, SMEs must adapt their strategies to meet local needs, comply with regulations, and ensure smooth operations across borders. Here are some effective strategies to ensure a seamless experience for SMEs while expanding into new geographies:
- Market Analysis: Before entering a new market, SMEs must conduct in-depth market research on consumer behaviour, local competition, and regulatory requirements. This will help them to create or modify the products, services, and marketing efforts based on local needs.
- Regulatory Compliance: Ensure to comply with local labor laws, consumer protection laws, and data privacy standards (e.g., GDPR in Europe), taxation requirements etc
- Localization: Ensure to support local currency and local payment methods including credit cards, mobile wallets, bank transfers and regional methods (ie UPI in India, AliPay in China etc) .Also provide local language customer support and localized services. Devise marketing strategy based on local culture and preference
- Technology for Operational Efficiency: Use technology such as cloud-based tools, integrated platforms, and automation to start local operation efficiently in areas such as inventory management, finance, sales, and customer support.
- Partnerships: Establish partnerships with local service providers, distributors to provide seamless experience to customers and for efficiency
Which upcoming AI-ML innovations do you anticipate will have the greatest impact on revolutionizing SME banking?
AI-ML and Generative AI innovations are revolutionizing the SME banking sector by improving efficiency, enhancing customer experience, and providing personalized financial services. These are some of key AI/ML innovations expected to significantly impact SME banking in the near future:
- Generative AI based customer support
- AI-Driven automated regulatory compliance and tax filings
- AI-Powered documentation and contract process
- AI-Driven hyper-personalized financial products and services: Personalized loan offering, insurance products, Personalized intereste rate and fee based on credit scoring
- AI-Powered real time fraud detection
- AI-Powered Predictive analysis for Cash flow and financial planning
- AI-Powered blockchain platform for smart contract, seamless cross-border payments, decentralized financial services
To ensure sustained growth and efficiency, SMEs should make better financial decisions. By providing seamless banking solutions tailored to their specific needs, Tide is helping them achieve these goals and creating a better landscape for them.
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