Reinventing financial services for SMEs: Validus

SME Banking
02/05/2023 Interview
profile picture of Vikas Nahata

Vikas Nahata

Validus Capital

Co-Founder & Executive Chairman

Based in Singapore, Validus offers a ‘business account that does it all’ in Southeast Asia. We interviewed Vikas Nahata, their Co-Founder and Executive Chairman.

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?

Validus operates in Singapore, Indonesia, Vietnam and Thailand, and each market is vastly different from the others and presents a unique set of challenges.

While traditional financial institutions in Singapore are at the top of the game when it comes to digital banking capabilities, their application processes, collateral requirements and turnaround times have not improved significantly. There is still a large segment of underserved SMEs who are unable to access financing from existing financial institutions, due to a lack of audited financials, business plan projections and collateral.

In Indonesia, Thailand and Vietnam, processes for SMEs to access credit continues to be time consuming, tedious and inefficient. Where available, the digital finance offering from existing financial institutions is still impeded by credit underwriting requirements that have not evolved, and existing players have struggled to balance the needs and credit characteristics of SMEs with the stringent criteria set out by local regulators.

It is not enough to rely on the SME to provide enough data for underwriting; in order to truly scale support for SMEs and drive financial inclusion, alternative methods of assessing creditworthiness are required, and credit scoring, underwriting and loan monitoring processes need to become more efficient.

The major established financial institutions maintain a strong foothold on the already banked segment of SMEs and thus have lesser incentive to crack the holy grail of using non-traditional data sources coupled with AI-driven automation to expand credit access and supplement underwriting of underserved segments.

As a fintech, Validus has the advantage of being agile and flexible without being hampered by outdated processes and clunky core legacy banking systems. This has enabled us to launch innovative alternative financing solutions for SMEs – including partnership-led supply chain finance solutions.

Want to keep reading?

Create a web account to get access to more insights

Related news & insights

SME Banking
18/05/2024 News

Banco Sabadell launches first fully digital account for self-employed individuals

This new Online Account features a 100% digital onboarding process and extends the benefits of retail accounts to self-employed customers....

SME Banking
18/05/2024 News

Hong Leong Islamic Bank launches BizHalal for SMEs in the Halal industry

BizHalal provides Shariah-compliant financing and Halal advisory support, facilitating businesses' entry into the Halal economic landscape.

Digital Reinvention
15/05/2024 Article

Financial innovation spotlight: May 2024 edition

We have selected five new innovative projects that we found particularly interesting. A world tour that takes in France with...

Digital Reinvention
13/05/2024 Article

Banking Innovation of the Month: Santander Spain’s SME/wholesale user experience

Celebrating groundbreaking initiatives in the banking industry, we open this year’s monthly Qorus-Infosys Finacle Banking Innovation Awards with a spotlight...

SME Banking
11/05/2024 News

Chase announces new digital products to help small businesses grow

In the U.S., Chase has unveiled a series of new digital products aimed at helping small business owners tackle their...

Digital Reinvention
07/05/2024 Article

Huawei's Intelligent Finance Summit 2024: Empowering banks

We're excited to announce Huawei's Intelligent Finance Summit 2024, happening in Shanghai from June 5th to 6th, 2024.

07/05/2024 News

Wag! Group introduces Transforming insurance comparison

Leveraging Wag!'s expertise and advanced technology in the pet insurance sector, WeCompare offers a powerful comparison platform spanning various verticals,...

02/05/2024 Article

Vote now to decide on the 2024 Innovation in Insurance Awards winners!

Discover the nominees for the 9th Innovation in Insurance Awards and vote to crown the best.