M&A Emerges As Key Strategy To Drive SMB Finserv Collaboration

In an environment in which connecting small- to medium-sized businesses (SMBs) to vital financial services and products is more imperative than ever, the world of SMB banking and FinTech is fostering an ecosystem of collaboration to expand availability.

In a recent panel discussion with Karen Webster, Wells Fargo Head of Global Product Management Judd Holroyde said he anticipates 2021 to further fuel the bank-FinTech collaborative spirit.

“When I look at FinTechs-versus-financial services, the reality is the competition that those two marketplaces generate actually generate innovative partnerships between themselves that create that bridge to progress,” he said.

This week’s look at the latest in partnerships finds players in the SMB financial services landscape embracing a range of avenues to collaboration — including mergers and acquisitions (M&A) — to connect SMBs to financing, digital banking services and more.

Lloyds Pilots Satago Technology

In its latest FinTech partnership, Lloyds Bank is set to launch a pilot of Satago Financial Solutions‘ platform, which facilitates invoice financing. For U.K. business customers of Lloyds, a six-month trial will see access to invoice financing via the Satago platform. In a statement, Satago CEO Sinead McHale pointed to the value of bank-FinTech collaboration for SMBs.

“Lloyds’ brand and reach, combined with our technology and speed of execution, is a great example of how established banks and innovative FinTech companies can work together to deliver better outcomes for [SMBs],” he said.

Orange Bank Acquires Anytime

In France, Orange Bank is turning to the M&A route to strengthen its digitization and SMB offerings. The financial institution announced this week that it has reached a deal to acquire digital-first neobank Anytime, which focused on SMB businesses, to further Orange’s reach with entrepreneurs. In addition to business accounts, Anytime provides SMBs with expense management, payment solutions, invoicing and cash flow management tools. In its announcement, Orange said it will begin to offer Anytime services to SMB customers in France, with plans to roll out its offerings across Europe. Financial terms of the takeover were not disclosed.

Opportunity Fund Embraces Credit Union Collaboration

Collaboration continues to drive expansion of SMB lending for the Community Development Financial Institution (CDFI) Opportunity Fund, which has announced partnerships with several credit unions (CUs), including Meriwest Credit Union, Self-Help Federal Credit Union, and UMe Credit Union. The nonprofit lender, based in California, is working with the CUs as part of its $1 billion commitment to invest in SMBs over the next two years, it said in its announcement. The partnerships will see the CUs be able to refer SMB members to the Opportunity Fund, allowing them to help SMBs get financed without having to forfeit the banking relationship.

“By working together, we can build a more inclusive financial landscape, especially for women, immigrant and entrepreneurs of color,” said Accion Opportunity Fund CEO Luz Urrutia in a statement.

Unifiedpost Broadens Open Banking Capabilities Via Takeovers

Also turning to the M&A strategy to drive bank-FinTech collaboration is Unifiedpost, which announced recently a series of takeovers. One of which is BanqUP, a Belgium-based technology firm that will “enable Unifiedpost Group to bring more open banking and data analytics capabilities” to its SMB customers. The acquisition adds to Unifiedpost’s offering to access banking data unlocked via open banking, and to analyze that information for cash flow forecasting and other use cases, it said. The companies said they plan to complete the transaction this month.