BTG Pactual Empresas co-heads Gabriel Motomura and Rogério Stallone discuss a digital-only approach to SMEs.
Global Finance: When you switched to a digital-only bank, how did you determine which services you wanted to offer to SME [small and midsize enterprise] clients?
Gabriel Motomura: When we launched, we went to the United States. We went to Eastern and Western Europe. We wanted to see what banks were doing globally to help SMEs. We wanted to know the No. 1 bottleneck that prevented SMEs from growing. And we went back home and started asking around. Almost 100% of the SMEs we spoke to said the bottleneck was access to capital.
The leaders of the SMEs we spoke with said, “I can handle getting more customers in, but we have no access to capital. You guys should start with capital.” So, we started this initiative by focusing on lending. We jumped right in.
GF: Giving SMEs access to the funds needed to grow their businesses was vitally important. What other capabilities did you implement to help SMEs grow?
Rogério Stallone: Normally what we see in dealing with someone who’ll become our client, the owner of an SME, say, an engineer. And he’s spending 95% of his time dealing with cash flow, dealing with the bank. He’d like to spend that time talking with his clients or developing new projects. Our mission is to help to facilitate the life he wants: To give him time to focus on his business, not dealing with bank bureaucracy. We offer our clients the time they need to grow their businesses.
GF: How do you help your SME clients save time?
Motomura: Look at a checking account as an example. At many banks, an SME user goes to his checking account, downloads a statement and imports it to Excel or Google Sheets. We developed a connection for business banking accounts that automatically links the account and the spreadsheet application. It’s done instantly.
Then you might have a company with more than one partner or decision-maker, and they want to know everything about money movement through their checking account. Usually, that would require both of them to access their accounts. We developed an integration where all partners are automatically alerted to every transaction. Say I spend 10,000 Brazilian reais (about $2,000) on building materials; my partner is automatically alerted.
The most positive feedback we get is about our integrations and connections.
GF: What are you doing now to improve your services to SMEs?
Stallone: In Brazil, we see banks with strong balance sheets and an appetite to lend money. Then we have SME clients who are doing a decent job. We also have fintechs creating new products for flexibility and agility. We aim to connect the banking and SME world with the fintech world. For example, we connected with ERP [enterprise resource planning] systems, so clients of those ERPs can transact very easily with them. Working with our bank, the client can instantly export and reconcile accounts payable from its ERP system onto our banking system. There’s no friction; they don’t have to log in and out a lot.
Motomura: We are now connected with more than 30 fintech systems in Brazil. We allow them to build solutions on our infrastructure. Fintech payment systems, for example, have been built on bank infrastructure. We do this because we know that fintechs can offer complementary banking services our SMEs need.
GF: You’re a digital-only bank. Do any of your SME clients say they’d like to be able to walk into a bank and have a face-to-face conversation with their banker?
Motomura: We are a fully digital bank with a human touch. We have real people working 24/7. If you have a problem … no problem. You can use chat. You can video conference with us. You can call us for some advice: weekends, Saturdays, Sundays, the middle of the night. Usually, no client wants to walk into a branch just to talk. They’re too busy. Some clients want to walk into a bank to cash a check but cannot, so they use another bank to do that.
Motomura: We are a fully digital bank with a human touch. We have real people working 24/7. If you have a problem … no problem. You can use chat. You can video conference with us. You can call us for some advice: weekends, Saturdays, Sundays, the middle of the night. Usually, no client wants to walk into a branch just to talk. They’re too busy. Some clients want to walk into a bank to cash a check but cannot, so they use another bank to do that. —LS