The opportunity in business banking for fintechs
The financial services industry is currently undergoing an unprecedented period of transformation. The rise of digital-first fintechs has challenged incumbents to rethink the traditional way of doing business and innovate or risk losing customers. Business banking, in particular, has become a battleground for existing banks, challenger fintechs and new digital banks to compete and was an early indicator that traditional providers need to start thinking differently or get left behind.
Fintechs have been actively targeting this underserved market for the last few years. They want to use technology and data sources to improve the customer experience compared to their traditional competitors. New players appear regularly on the scene catering for specific product sets such as point-of-sale finance, international payments or mitigating the impact of late payments on suppliers.
The global market opportunity in business banking is huge and growing rapidly with more countries beginning to open up their markets which will create more competition and lucrative opportunities that both banks and fintechs are actively chasing. Many options exist for businesses looking to upgrade their financial tech stack through existing enterprise solutions or custom built fintech offerings.
Australian fintech Zeller doubles valuation to over $1 billion with $100 million raise, to push deeper into business banking
The Australian fintech company Zeller recently doubled its valuation to over $1 billion, after raising $100 million in funding to push deeper into business banking.
This significant investment in the fintech sector has created a unique opportunity for other companies to join the market and capitalise on the increased demand for business banking solutions.
In this article, we will discuss the opportunity presented to fintechs in the business banking market.
The Australian Fintech Market
The Australian fintech market presents an exciting opportunity for organisations looking to expand their operations and take advantage of the rapidly growing financial technology industry. Fintechs are becoming an attractive option for many businesses as they offer a more hassle free, efficient and cost effective approach to conducting banking activities than traditional financial institutions. As such, there are a large number of fintechs currently operating in the Australian market, all providing unique services to the banking and finance sector.
In 2020, the fintech sector in Australia attracted over $2.7 billion in investment capital and is estimated to have grown at a compound annual growth rate (CAGR) of 10% over the past five years. Such growth is largely attributed to consumers seeking innovative financial solutions and companies embracing digital transformation as part of their overall business strategy.
Regarding specific regions or sectors currently most popular within the fintech space, Australia’s startup scene remains very active with much venture capital investment being deployed into software-as-a-service (SaaS) businesses for applications such as lending, payments and wealth management tools. Additionally, more established players within the industry — including credit card issuers and insurers — are exploring opportunities around customer engagement through automated processes such as AI – enabled chatbots and machine learning algorithms for personalised customer experience.
Overall, Australia’s fast growing economy combined with its status as a hub for innovative thinking makes it an ideal place for organisations looking to explore opportunities in business banking from both a technology and regulatory perspective. As such, it is certainly worth exploring if you are considering entering this exciting market.
The Business Banking Opportunity
Business banking represents a large opportunity for financial technology (fintech) companies. Currently, there is an estimated $7 trillion worth of deposits held in business banking accounts as well as approximately $100 billion in business lending outstanding. This market is predicted to increase as businesses become more digitally focused, driving the need for more comprehensive solutions for their traditional banking needs.
Fintechs have been working hard to develop technologies to disrupt this historic market and grow their customer base. These technologies range from specialized software solutions to digital payments and other innovative features such as real-time analytics, automated onboarding processes, AI-driven risk management, robotics process automation and more.
Many fintechs are developing products designed specifically for business customers such as cardless cash withdrawals via mobile app, frictionless payments with contactless cards or NFC tags and faster settlement process services. Additionally, they are offering various types of financing opportunities such as invoice or merchant financing which can help bridge any short-term liquidity gaps.
By utilizing technology-based products to deliver services that traditional banks may not be able to offer (either due to cost or time constraints), fintechs have created new markets perfect for small business owners who often seek quick solutions with minimal paperwork. As the demand for these types of services increases, so does the value proposition from these fintech companies in terms of offering top-notch customer service at an affordable price point.
Australian Fintech, Zeller, has seen a remarkable growth as it has doubled its valuation to more than $1 billion with its recent $100 million raise. With this, it is pushing deeper into the business banking industry.
This is an incredible success for a fintech, and is certainly an example for other fintechs. Let’s look at what exactly Zeller has done to achieve this success.
Overview of the Company
Zeller’s Success is a global fintech pioneer that provides cutting-edge banking services for businesses worldwide. Its convenient, safe and secure platform helps business owners manage their finances quickly and easily. It provides easy access to traditional banking services such as accounts, loans, online transfers, and payments.
With its in-depth financial tracking tools and responsive customer service staff, Zeller’s Success has been a major force in simplifying business banking. It also offers powerful fintech solutions such as mobile apps that enable customers to make payments on the go or send money across multiple locations simultaneously. In addition, customers can use advanced data analytics to keep track of their cash flow and make informed decisions about their financial needs.
Zeller’s Success is designed for businesses of all sizes— whether you manage a large enterprise or just an independent trader– it can provide all your business banking needs. The platform also offers competitive interest rates on various products like credit cards and savings accounts that can help you save big on transactions or investments.
Zeller’s Success is constantly innovating technologies to ensure flexibility and stability for its users while maintaining the highest standards of data security protocols to provide a safe experience for customers worldwide.
The $100 Million Raise
The Zeller success story was just the beginning of a wave of growth for fintechs specializing in business banking services, as a result of innovative product offerings and disruptive models.
In October 2018, Zeller pulled in an astonishing $100 million in series A funding from investors which gave them the resources and backing to push forward their flagship products. This round of funding brought their total to $120 million raised since their inception, with the executives at Zeller stating: “We are committed to building tools that make it easy for businesses to access capital and manage cash flow better than ever before.”
The funds were set aside by Zeller to help further drive their plans to dominate business banking; namely those plans were to bring new, innovative products like virtual cards and real-time payments, as well as expanding their global presence into new markets like Europe. This raised eyebrows with some analysts who thought they might be too ambitious with such lofty goals. But that thought soon vanished when experts saw what came next from the fintech powerhouse – a series B funding round for $300 million fueled by private investors at scale.
By May 2021, Zeller had reportedly almost quadrupled its user base and revenue had grown remarkably with no signs of showing down. Many other players had fallen by the wayside because Zeller had fast become the only game in town worth playing according to many tech professionals looking for innovation from business banking services. They had created an empire fueled by agility where competing on cost wasn’t enough – they now competed on innovation powered by some impressive engineering minds, so much so that no competitor could easily keep up with them and challenge their hold on this growing niche market sector anymore.
Implications for the Fintech Market
The news of Australian fintech Zeller doubling its valuation to over $1 billion with a $100 million raise to push deeper into business banking has significant implications for the fintech market. It shows that the world of business banking is ripe for disruption and opportunity, and that fintechs have a real chance to make a positive impact in the industry.
Let’s look at what this could mean for the fintech sector.
The entrance of new players in the fintech space has caused an increase in competition for traditional banking services. Banks are no longer the sole providers of financial products and services within their regions, leaving them with little choice but to respond to the challenge posed by emerging fintechs.
Fintechs can offer innovative products at competitive prices and faster delivery times than traditional banks. This gives customers more choices when it comes to banking services, particularly on small business banking, real-time payments, merchant services, as well as mortgage-related services. Furthermore, the increased customer interaction offered by digital technology has enabled fintechs to build relationships with customers much more quickly than banks have historically been able to do.
As a result of this increased competition in the business banking sector, commercial banks have had to rethink their strategies for retaining customers and preventing churn. Banks are launching digital platforms or partnering with fintech companies to stay competitive. However, this strategy of embracing technology is still relatively uncharted territory for many commercial banks, making it increasingly difficult for them to keep up with the agile and efficient solutions that most fintechs specialise in.
More Investment Opportunities
Recent trends suggest that the financial services market is being transformed to become customer-centric due to the advancement of new technologies and products. With a surge in demand from both small companies and start-ups, fintechs are playing a major role in providing better business banking services. Introducing new fintech offerings has opened up more investment opportunities for banking sectors and investors alike.
The investors, looking to gain long-term benefits from their investments, are now finding an opportunity to explore the various products available through fintech companies. By investing in leading fintech companies, investors can access promising, dynamic markets such as mobile banking, payments infrastructure and digital currency, which offer potential returns at attractive valuations. This provides not only a chance for them to diversify their portfolios but also opens creative channels for risk management strategies.
Furthermore, businesses seeking banking services can benefit from superior customer experience offered by digital banks and access better products with tailored features and frames that meet their specific needs. Focusing on creating innovative customer experiences with cutting-edge technologies makes fintech companies excellent investments for banks as they offer fast turnaround times with higher quality services at lower cost points than traditional banks do. This leads to higher returns on capital for all stakeholders involved.
By investing in leading fintech projects, traditional banking institutions can stay competitive while gaining insights into the future of finance since it requires less manual work and offers significant savings compared to doing things the traditional way through brick and mortar banks/infrastructures. With more investment opportunities available now than ever before brought about by advancements in technology, certain players have established themselves as leaders across different spheres while traditional financial institutions have been taking small steps towards being inclusive to retain better control over their operations through collaborations with tech-savvy partners like Fintechs – who will likely take the lead given the array of product offerings they provide from payments processing solutions to risk management software platforms helping them stay ahead of their competition offering unparalleled value addition under one roof.
In conclusion, the business banking opportunity for fintechs is clear. As traditional banks are hampered by legacy systems and regulations, fintechs can disrupt the industry with innovation, particularly in data analytics, optimize risk management and provide more personalised customer experience. These changes will be dependent on the implementation of secure authentication measures to ensure customer data privacy and regulatory compliance.
With careful consideration of customer service, security and scalability, fintechs can use their tech-driven models to create powerful changes in business banking. With great success in other fields already seen by many successful fintechs globally, this could be a significant opportunity for disruptive innovation and improved user experiences across the entire financial sector.
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