This week Tide, an up and coming player in the small business banking sector, announced it had raised a further $US14M as it looks to ramp up its suite of product offerings to SMEs.
Even without a banking licence- a ‘management distraction’ Founder and CEO George Bevis has said – the company has already managed to build out a platform that creates new bank accounts in minutes. It also plugs the annoying gap between invoice received, payment made and transaction tagged. The app allows you to add an invoice direct from your email inbox into Tide, set up a payment and tag it i.e. office expenses.
For a small, simple business, this is gold. However for a bigger business, they’ll need more weapons in their arsenal. This explains the tie up with SME lender Iwoca.
The company is also beta testing bank feed integration with Xero as we speak, which will no doubt open up the door to a raft of new users.
Bank feeds have been such a success for cloud accounting platforms and their banking partners, that many businesses will refuse to join a bank that doesn’t have this in place. And it makes perfect sense. The drudgery of manual bank reconciliation is still a fresh memory for many business owners and bookkeepers. And while some small, micro businesses might be able to get by with just Tide for a while, most serious business need a solid set of accounts sooner rather than later.
Automated banking and accounting is certainly the future – and businesses like Tide and Xero are at the forefront.
Auto-coding transactions is a big focus for Xero, who are working on machine learning in efforts to streamline the process for businesses. According to CEO Rod Drury, there are about 10.1 million unique codes on Xero, with businesses regularly accidentally attaching the wrong code to an invoice or transaction.
It’s a smart move by the platform, who’s initial success was driven by being an earlier adopter into the cloud space, way ahead of the big incumbent players.
But cloud and slick UIs are becoming the norm in the sector. Automating more drudgery is the future.
That’s the secret sauce in SME fintech.