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1mo

🫣 Hidden business customers? Hidden opportunity for banks! According to our data, 40% of our small business users connect a personal account to our solutions, instead of a business account. 📲 By targeting this segment with the right proposition and solutions, this presents a golden opportunity for both banks and small businesses alike. 💡 In our latest blog post, Nick Reid highlights why these business customers are ‘hiding’ out in plain sight, and delves into the opportunities that are presented to banks when they get it right. Watch Nicks' snippet below or read the blog in full here: https://lnkd.in/ehqwxP5P

Transcript

OK. Something else we're seeing a lot from the banks we're speaking to is that there are quite a few hidden business customers out there. And so some of our own data suggests that the sole traders that are using the services that we provide, 5 UK banks are, are, are very much part of that hidden customer base. So 40% of the sole traders who are using our services and do so with a personal current accounts that underpins. The management of their business finances is quite interesting when you speak to banks about this and generally they acknowledge that it's a problem and they know it's a problem because technically those sole traders are operating against the terms of use of their personal current account and because it many stipulates that they can't use it for business purposes. But the tricky challenge for banks in that space is that as soon as they ask the business that sold. Rights of upgrade to a business current account and they'll leave the bank and just go elsewhere because there's an inflection point where the price sensitive and they don't really want to upgrade to a business current account that they have to pay for and without any tangible benefits in return. So if you do the maths on the millions of sole traders that there are out there and however many might, 40% using our metric. But however many might be using personal accounts to manage their business finances, that presents a real opportunity and for banks to provide a business proposition, provided that it's it's strong enough in the eyes of the sole trader and to warrant paying for either directly in terms of account fees or via some other mechanism which might be access to other. Natural products might be that that value exchange where they connect external sources of data, which in turn then helps the bank better understand that business and better serve that business and ultimately be able to leverage that data and to ultimately commercialize the proposition for banks. So understanding their wallet share, acquisition of deposits and promoting other financial products and services. So that hidden customer base is something that we're seeing a lot that also presents opportunities for. Council legislation coming down the line, so we're thinking specifically of the 2026 legislation for making taxes digital, which will require businesses to submit digital returns for income tax, for self-assessment. So for all those businesses out there who might be banking from a retail proposition, they're going to be lacking some form of digital capability to submit their tax returns, leaving them no other option other than to go to another service provider who isn't their bank and that. Again presents a challenge for banks because again, they're very slowly being relegated down the list of trusted advisors to businesses.

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