We often read that the offers of traditional banks are not adapted enough to SMEs. So, we set out to discover new players dedicated to SMEs. Federico Sforza, CEO of Banca AideXa, gives us his point of view and shares with us what Banca AideXa offers its customers.
In which countries do you operate and how do you perceive the banking offer to SMEs there? In your opinion, does the offer from existing financial institutions meet the needs of SMEs?
Banca AideXa was founded in 2020 with the aim of providing a concrete response to the needs of Italian SMEs with an offering that was previously missing from the market. Banca AideXa is the first fintech bank in Italy with a full banking license created to serve specifically the SME segment. The SME segment was and still is currently poorly served by the banking industry, despite contributing significantly to the country's productivity growth. In fact, small businesses are the backbone of the Italian economy and are the main creators of new jobs and development: 50% of GDP is made up of small businesses with fewer than 50 employees. It's the largest SME market in Europe (source: OECD, European Commission - Reports SME Cerved 2020).
Entrepreneurs have very specific financial needs: 42% of small business owners expect efficient and fast financial services and more than a third want transparency and simplicity (source: GFK focus group). Banca AideXa operates in Italy with the goal of providing Italian businesses with secure and fast access to credit, thanks to the use of technology and digital channels
What is your business model and your core value proposition for SMEs?
Banca AideXa's goal is to make the world of online financing very efficient for SMEs, starting from the assumption that those who are running a business don't have time to lose: they can't spend hours sitting in a bank just to ask for a loan or wait weeks before the money is deposited in their bank account. Taking advantage of the opportunities of open banking, Banca AideXa makes it possible for SMEs to receive a loan proposal in just a few minutes and to have the amount credited to their bank account in a few days, without the need to sign or print any paper documents.
The process of applying for a loan has been designed to be as simple as possible and entirely online, manageable autonomously and independently by an entrepreneur. However, since human contact is important for building trust, Banca AideXa’s Business Bankers can help business owners at any time and by any means (via email, chat, over the phone, on WhatsApp or Messenger). Since Banca AideXa was founded it has also developed a large and strong network of partners in all regions of Italy, that enables the bank to combine the digital component and local presence in financial services to SMEs.
The ability to provide a real-time loan proposal is made possible by exploiting data analytics, artificial intelligence technologies, open banking, and an extensive ecosystem of partners and information sources that gives the capability to reconstruct in real time the history of the company, assessing their creditworthiness and alignment with the products offered. AideXa has already developed a proprietary scoring system: for each loan application, AideXa evaluates up to 10,000 different pieces of information from financial statements, credit bureaus' data, transactions of customers' bank accounts and several alternative data sources (e.g. web-based). Banca AideXa offers mid-term loans up to €500.000, up to 24 months, both unsecured and state-guaranteed, with no personal guarantees or collaterals, with constant monthly instalments at a fixed interest rate. In 2022, after an additional equity round of €12 million, Banca AideXa launched state-guaranteed long-term loans up to €1 million, up to 60 months with constant monthly instalments at a fixed interest rate.
To enhance and optimize customer management and their experience with AideXa services, in the last year, the bank has implemented the Hubspot-based CRM tool, which provides Banca AideXa an integrated and automated management of all stages of the funnel and customer touchpoints.
How's the experience at your institution different compared to other players? What are the unique features you offer to your customers?
Banca AideXa was founded with the idea of making Italy a business-friendly country. The offer of Banca AideXa to SMEs distinguishes itself from traditional banking institutions because it leverages the opportunities of technology, open banking and the PSD2 regulation, to offer customers simple and fast experiences in accessing credit. Open innovation strategies applied to the banking industry can lead to the creation of value for customers. The Banca AideXa service is based on the open banking model, which grants financial service providers access to consumer financial data – with their consent – through the use of application programming interfaces (APIs). Through open banking, when applying for a loan entrepreneurs can authorize Banca AideXa to access their current account information on a read-only basis simply by accessing their online banking. The balance, recurring payments and incoming/outgoing account transactions are read in an instant.
Thanks to PSD2, the process is secure because Banca AideXa does not store the login credentials, accesses the account only once and only for the time necessary to acquire the information needed. The benefits for customers are enormous and result in real-time savings with just a few clicks. Data drives the digital experience and the decisions made. Thanks to open banking and an extensive ecosystem of partners and information sources, Banca AideXa is able to reconstruct the history of companies, assessing their creditworthiness and alignment with the products offered. The digital innovation championed by Banca AideXa also shows in its website interface and platform, for which it has won two design awards: in the 2022 iF Design Awards and 2022 ADI Design Index.
Being a banking provider without physical branches, customers only interact with you remotely. How do you ensure an excellent sales and service model leading to a great customer experience with interactions being 100% digital?
For Banca AideXa the customer experience is essential for building loyalty, and thus the process of applying for financing has been designed to simplify the customer experience. Despite being a 100% digital bank, Banca AideXa is aware of the importance of the human factor and to best support the customer in their experience with financial services, we have established a network of Business Bankers, professionals available for direct communication with customers through digital channels, from video calls to chat. Business Bankers are always available to answer questions about financing and support clients in every phase of the request. Just make an appointment with a click. To enhance and optimize customer management and their experience with AideXa services, in the last year, the bank has implemented the Hubspot-based CRM tool, which provides Banca AideXa an integrated and automated management of all stages of the funnel and customer touchpoints.
We were born during the Pandemic, and we offer any time a solid relation with our remote Business Banker network via videochat, Whatsapp and other digital channels.
Where do you see your institution in five years? What impact or difference are you trying to achieve for small business owners in your portfolio?
We see Banca AideXa becoming the leading neobank in Italy fully dedicated to micro and small business, serving entrepreneurs with simple, fast, transparent and fully digital lending and transactional products. The impact is to simplify entrepreneurs’ work, helping them to realize their ideas, be it in fast access to lending or in convenient transaction management. This impact is achieved thanks to outstanding data usage and open banking, AI, and technology (our X factor), as our name exemplifies. We were born during the pandemic, and we offer at any time solid relations with our remote Business Banker network via videochat, WhatsApp and other digital channels. In less than two years since obtaining our banking license, we have launched five financing products for SMEs, and we have just launched the first current account designed for businesses, with unique features in the Italian landscape, aimed at supporting enterprises even more. The values that will continue to guide our choices will be speed and ease of access to credit, and thanks to our work we will continue to add value to the projects of SMEs, giving Italian companies the tools to enhance their potential. In addition to expanding financial solutions for SMEs, we will also continue to invest in technological innovation and strategic partnerships, such as those signed in recent months with BancoPoste and Actico.
Can you specify some major milestones accomplished on your institution's journey?
In just three years since launching, Banca AideXa has provided €300 million in funding to Italian SMEs, and raised €200 million with X Risparmio. We now have 6,000 customers, a 4.2 Trustpilot score on lending products, and 76 employees based in Milan. In 2021, AideXa became the first fintech in Europe dedicated to small business to obtain the full ECB banking license, and in 2022 it ranked #2 in the LinkedIn Top Start-ups in Italy. March 2023 saw a new milestone with the launch of Banca AideXa’s business bank account.