Imagining the future: Virgin Money’s strategy to help SMEs navigate a changing world
A few weeks ago, Virgin Money released the ‘SME 2050’ report which includes a series of predictions by UK futurologist Dave Coplin. It was a nice opportunity for Qorus to ask Graeme Sands, the bank’s Head of Business Lending & Products, about this project, the SMEs of tomorrow’s world and the offer for SMEs at Virgin Money.
A few weeks ago, Virgin Money released the ‘SME 2050’ report which includes a series of predictions by UK futurologist Dave Coplin. It was a nice opportunity for Qorus to ask Graeme Sands, the bank’s Head of Business Lending & Products, about this project, the SMEs of tomorrow’s world and the offer for SMEs at Virgin Money.
Where did the idea for the SME 2050 report come from? Can you explain your approach?
A huge amount has changed over the last 30 years in terms of running a small business, with the rapid rise in technology – not least online and smartphones. But much has remained the same, with most small business owners focused on cash flow, paying the bills, keeping their customers happy and growing their business. We wanted to look into what might change for small businesses over the next 30 years and how they can best prepare for that, and that’s why we worked with futurologist Dave Coplin to produce the Quantum Leap report.
What lessons do you draw from this report? What will the SMEs of the future look like?
Nobody can predict the future with any certainty in terms of exactly what will and won’t happen. But the report provides insight into the direction things could go in, and many of the things discussed in the report are extensions of what we already have around us today. Wearable tech is everywhere now, with smart watches and fitness bands, and that could move to cybernetic implants. We also use virtual assistants now in our everyday lives – Alexa, Google and Siri – to make shopping lists, set reminders and recommend restaurants. Advances in quantum computing and artificial intelligence could mean these become digital avatars who can help run our business, giving business owners time to focus on other priority tasks – or even get some rest. The key thing for SMEs is that with the continued technological transformation we are likely to see, the golden rule is that the agile survive – and that is the strength small businesses have. Stay nimble, embrace technology that helps your business and your customers, and surround yourself with a good network of people and business partners.
If the vision of the SME of the future presented in the report proves to be true, what should the offer for SMEs look like in the future?
There’s been a huge amount of change for business owners over the last 30 years and that is only going to continue over the next 30 years. But this is what small business owners are great at doing – time and again they show their agility and ability to see the opportunities that change creates. We know business owners are extremely busy and are now using data from many different sources, so what they need are partners who can help them navigate that changing world around them. That’s what our new M-Track product offers, by providing an online dashboard that connects to multiple data sources, so they can track their business’ current health – and help them get a view on its future health as well.
How has your service model/value proposition developed in the last 18 months? Could you highlight the key projects Virgin Money has delivered to SME customers?
We made some big changes over the last 18 months to improve our proposition for SME customers. In November last year we launched a brand new fee-free digital business current account aimed specifically at small businesses with an annual turnover of less than £1m who want to do their banking digitally. It offers cashback of 0.25% on all debit card purchases, and all customers are eligible for an optional £1k overdraft.
We’ve also recently launched M-Track, making it much simpler for small business customers to manage their money and business performance. By connecting their separate business applications into one platform, M-Track provides customers with a snapshot view of their business’s position, with personalized insights, drawing together data from their current account, accountancy software, e-commerce platform, social media and other business tools. This saves them time and gives them control, with almost 20 different services available to be linked at launch, and more to be added over time. M-Track also includes free access to Fluidly, a cashflow and forecasting tool which uses data within the dashboard to predict the future and help businesses plan.
How do you see yourself competing with the fintechs and challenger SME banks in the years to come?
We have a unique position in UK banking. With 6.5m customers, we have the scale, capital and resources to challenge the big five banks – supported by a broad product suite – but are agile enough to respond in a way bigger banks can’t. We have the attraction of one of the world’s most trusted brands and are tapping into that Virgin ecosystem to offer customers benefits and rewards that others can’t replicate. For example, we work with Virgin StartUp to provide support, mentoring and training for our SME customers, who get exclusive access and discounts to some of the Masterclasses and Scale Up events that Virgin StartUp run. Customers are looking for a market-leading digital customer experience, and the investment we are making in our proposition will ensure we can meet and exceed those evolving customer needs.
We don’t see ourselves as being in competition with fintechs. We actively work in partnership with many fintechs to help transform our business bank as we continue to build our digital first proposition. For example, M-Track has been created by working with a number of different fintechs to bring together their specialisms into an incredibly useful tool for customers. We also worked with fintech Life Moments to build an app for business customers – the Sustainable Business Coach – that provides an objective assessment of a business’ ESG impacts and gives guidance on how to improve. Fintechs have played a vital role in us bringing these things to market quickly and efficiently.
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