Valentina Kristensen of OakNorth says about 83% of businesses bank with one of the big five banks, yet incumbents still offer slow account opening and disjointed service.
Kristensen argues businesses with roughly $12m to $100m in revenue fall into a gap, and banks should map each customer's jobs to be done rather than offer a product menu.
Sarah Kocianski says the main blocker to innovation is that businesses lack time to research alternatives, so solutions must be framed as a clear efficiency or saving.
Why mid-sized businesses remain the overlooked customers of commercial banking
Commercial banking still serves many businesses poorly, especially mid-sized firms with global needs. The panel uses 11:FS's six characteristics of digital commercial banking to argue that real-time data, embedded services and consumer-grade experience can close that gap. Adoption depends on showing clear savings and building trust, since owners are short on time and wary of change.
Takeaways
Mid-sized businesses are underserved by banks. About 83% of businesses bank with a big five bank. Neobanks mostly began with retail or micro-business offers. Firms with roughly $12m to $100m in revenue and several entities fall into a gap. Banks should map each customer's jobs to be done.
Innovation must be framed as saving time or money. Businesses lack time to research alternatives, which Kocianski calls a major blocker in large organizations. Offers land when they show a clear efficiency or saving. Sood adds that customers are often surprised by what is possible, so educating them builds trust.
Real-time data should replace sector labels in lending. Kristensen says banks lump businesses into a dozen or so categories. OakNorth's loan to Third Space, a luxury health and fitness company, shows the value of looking past sector labels to the actual business.
Business owners expect consumer-grade experiences. Kristensen says owners now expect the app features they get personally, a shift since Metro Bank launched in 2010. Kocianski says corporate treasurers want the same, despite heavy compliance and old ERP systems.
Speed needs predictability and context. Sood says immediacy matters but predictability matters as much, and Airwallex pays out instantly in 60 countries. Kocianski warns that real-time offers need personalization and context, because customers can make decisions they cannot easily reverse.
Data ownership and AI querying shape the next phase. Kocianski argues customers own their data and lenders must be transparent about its use. Sood says data volume overwhelms customers, so AI querying could help. Open banking took different routes in Europe and the US, where Plaid capitalized.
Closing predictions
Sood expects embedded finance and AI to be the two areas with the greatest opportunity for fintechs.
Kristensen wants banking to return to the relationship-driven model of fifty or sixty years ago.
Kocianski argues innovation must be responsible, and firms should ask why before how.
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