The future of financial services is experiencing immense digital disruption offering greater growth prospects for Small and medium-sized enterprises (SMEs).
Undeniably, there is an urge from open banking platforms to take advantage of the data boom to create more opportunities and facilitate the process of granting loans to SMEs.
For instance, Krea, a specialised marketplace for SME financing based in Stockholm connects the largest network of lenders in Sweden, allowing SMEs to apply freely and find digital loans that suit their needs, using customer data.
This is fundamental to allow the good delivery of services and for lenders to grant companies the finances they need to grow their businesses with minimum complications.
For both lenders and SMEs, this digital disruption is offering many positive outcomes.
With this growing reliance on data, Krea’s lenders have had easier access to a great number of potential customers with up-to-date insights on their business financial transactions.
It allowed easier access to SMEs’ bank account data and assess their loan applications in a shorter and more dynamic way.
Also, with periods of doubt and uncertainty that have been recurrent with Covid- 19, a data-centred approach has immensely simplified the process of evaluating prospective customers.
Moreover, on the SME side, they can connect easily through an application programming interface (API) or directly by placing manual bids on its interface to gain access to a cost-effective, low-risk loan request application.
Hence, the time-efficient, cost-effective, and secure approach offered by Krea has immensely impacted loan application demands.
Kosma, another open banking platform has extremely helped the development of Krea.
Indeed, Krea has been relying on Kosma’s Account Information Services (AIS) to gather data even more quickly, using the banks’ PSD2 APIs which have played a major role in allowing Krea to collect data by connecting to customers’ online banking interface.
PSD2 is a European regulation for electronic payment services, making payments more secure, boosting innovation, and promoting businesses to adopt new technologies.
By collaborating with Kosma, Krea’s total loan applications increased to almost 30 per cent.
This partnership has widely increased the percentage of loan applications that included structured open banking clients’ data from 2 per cent to 11 per cent in just two months, interest rates have experienced a 4 per cent decrease for businesses that provide account access and a high level of success with 15 per cent higher chance of having its application approved.
Krea’s has an unlimited potential that needs to be seized to build a more accessible lending setting for SMEs, with Kosma’s collaboration representing a great first step for its growth.