From XU Magazine, 
Issue 36

Why building a bank for the self-employed is now more important than ever

This article originated from the Xero blog. The XU Hub is an independent news and media platform - for Xero users, by Xero users. Any content, imagery and associated links below are directly from Xero and not produced by the XU Hub.
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Small businesses make up a huge part of the UK economy, but the banking products available to them traditionally haven’t been fit for purpose. With this segment showing no signs of slowing down, it’s more important than ever to give them the banking products that are better suited to their needs. They need a bank account that is built specifically for them.

As of September last year, Finder quoted that 99.2% of all businesses in the UK were SMEs. It’s a large part of the market. Business banking is of course nothing new – every high street bank will offer a business bank account. Most challenger banks such as Monzo, Revolut and Startling all have business account options too.

But what about those one-man bands? The person just starting out. Or the freelancer, the contractor or the self-employed only on the weekend-ers? They need a bank account too. One with little to no fees, one that has their needs in mind, offers features to help them run their businesses on the go, and is unique to them as micro businesses.

The difference between business banking large and small

To understand why having a bank account that serves the small end of the SME market is important, we first need to understand the difference in large and small business bank accounts today.

Interaction with the product is key here. With large enterprise banking, the customer experience is similar to buying enterprise software which might involve banks pitching for business and putting together bespoke solutions to fit clients’ needs. Because of this, the products can be complex and structured in line with individual clients’ circumstances and objectives.

For small business banking, the customer experience is very similar to retail banking. It’s largely self-serve, especially as the mobile-first experience becomes the norm. Finder’s Business Banking Statistics report from 2022, found that 64% of business banking account holders say online banking is the most valuable feature of their accounts.

These customers value speed and simplicity of use, and that’s what drives their choice of banking provider. There is also more product integration into a wider small business software ecosystem, like accounting software, to help make running their business easier.

And that’s the niche that Mettle fits into. It serves the growing self-starter community – those limited companies or sole traders with up to two owners, who don’t want to pay fees on their banking product, and want to easily be able to handle their business finances wherever they are.

The different needs of SMEs

This is because SMEs have different needs from other business banking clients. And it wasn’t until challenger banks started stepping into the space that these needs moved their way up on the agenda.

Small businesses are often time-poor and overwhelmed by administrative tasks, so they need banks to make their lives easier by reducing day-to-day hassles. Branch appointments and long (paper) application forms are no longer acceptable to most small businesses. That’s why they want fast, simple and mobile-first banking.They also want their banking products to help them understand cash flow and manage bookkeeping and tax. This is where fintechs come in – and more specifically, where Mettle enters.

Helping customers complete their business admin jobs

Mettle’s offering centres around this, with a ‘jobs to be done’ approach. What jobs do our customers need to complete or solve in order to run their business finances smoothly? Breaking it up into two bite-size chunks – payments and tax – means we can create products and solutions around these.

Payments is everything from sending and receiving invoices, uploading receipts, setting up direct debits, categorising payments, or sending payment reminders. Being able to make a customisable invoice on-the-go, or, after a long day, being able to quickly send out payment reminders with a touch of (a few) buttons on your phone, gives people the ease to do business when and how they want.

The second is tax. This, for businesses, starts with bookkeeping and getting their records in order. The jobs that need to be done for tax aren’t simply sending off their tax return. It ranges from categorising payments and uploading and matching receipts to invoices, to getting the books in order for that annual Self Assessment tax return. Whether businesses are connecting to accounting software, or doing it themselves, they still need a way to capture and keep this information. Getting tax ready is a major milestone each year for a small business owner.

And Mettle helps with exactly that. The functionality is built around the customers’ ability to complete these jobs with ease. Mettle wants to give people the tools they need to complete their business admin, so they can have more time to focus on actually running their businesses.

Mettle started out as an idea in NatWest and has since grown into its own bank account. Now built on the NatWest banking licence, the once-small business bank account has seen rapid growth and can offer its customers even more tools to help them run their businesses.

With SMEs making up such a huge part of the economy, it’s time we gave them the tools they need in order to succeed.

Why leave it there?

To find out more about Mettle

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