EXCLUSIVE: “Putting Small Busıness First” – Mark Hartley, BankiFi in ‘Discover Sibos 2025’

What would it take for mainstream banks to win back Britain’s small businesses? We spoke to BankiFi’s Mark Hartley about how the fintech is combining data, ‘pragmatic AI’, and engagement banking to do just that

Technological shifts, like open banking – which surpassed 15 million users in the UK in July – and the inexorable march towards cloud-based services, have redefined what’s possible in banking. Regulatory developments, meanwhile, including Consumer Duty, have intensified the focus on better customer outcomes.

Add to this the pressures of a world-changing pandemic and enhanced customer expectations in a digital-first world where people can order anything at the click of a button, and the picture looks very different to a decade ago. However, one constant has remained.

Small businesses – the backbone of the UK economy – continue to be underserved by traditional financial institutions. This is due to a range of factors, such as heightened risk aversion among banks, outdated processes, and an overreliance on rigid credit scores and underwriting criteria.

“Cost-to-serve is another reason given by mainstream financial institutions when they’re asked why they haven’t serviced small business requirements particularly well,” says Mark Hartley, Founder and CEO of BankiFi, a rapidly growing fintech that provides a platform and integrated services to help banks better meet the needs of their small business customers.

“Historically, banks have struggled to foster the relationship that SMEs want from them.”

This neglect is damaging to a bank’s prospects – and baffling, when you consider that SMEs are estimated to account for more than 99 per cent of private sector businesses. It has also paved the way for Monzo, Starling, Revolut, and a host of other agile challengers to penetrate deep into the market and set new expectations. As highlighted in recent research by BankiFi, of the 846,000 new UK businesses formed in 2024 – the second-highest number on record – half (48 per cent) opened accounts with digital challengers. This is up from just two per cent in 2016. So what can mainstream banks do in response? They will need to move beyond banking.

Leaning into the next frontier

The term ‘beyond banking’ first emerged in the 2010s, driven by fintechs. The first major shift happened in retail banking, with neobanks introducing innovations like real-time payment alerts, savings pots, and spend categorisation – features which were later adopted by the mainstream banks. This concept has now been translated into business banking, with entrepreneurs and other business owners looking for digital-first propositions as standard.

There are a growing number of features that UK businesses now see as table stakes from online and mobile banking, whether it’s intuitive dashboards that summarise their financial position, integrated invoicing capabilities, or automated bill payments. Without such features, a bank’s digital proposition will quickly fall behind – and this should act as a call to action for traditional banks looking to recapture market share. The good news for mainstream banks is that doubts have been cast about the ability of digital challengers to retain growing businesses, who may prefer a move to a larger, established name as their business scales and their needs grow.

While nimble neobanks may have speed to market, incumbent banks have their own advantages, such as lakes of data to draw on and more advanced compliance competencies. This is where BankiFi comes into play. It works with banks like The Co-operative Bank and Metro Bank to help them better anticipate needs, personalise engagement, and grow small business relationships. Its propositions are powered by small business insights and flexible, bank-grade technology that teams live behavioural data with embedded AI.

“The neobanks have done a great job in revolutionising what a banking experience can look like, but it’s not rocket science,” says Hartley. “What they’ve done provides a great blueprint for the mainstream financial institutions to almost use as a proof of concept – and they’re now doing that.”

A growing appetite for pragmatic AI

A recent study by Juniper Research found that UK banks will invest £1.8billion in genAI by 2030 as they seek to increase productivity, reduce operational costs and adapt to changing customer expectations. Hartley agrees that AI will have a huge role to play – but not simply as an add-on, rather as a trusted orchestration layer that makes small business banking data more actionable and human. The first step is defining the right use cases.

“In our conversations with banks, it’s clear they’re looking through a lens of what AI can be used for, what it should be used for, and what it shouldn’t be used for,” says Hartley. “The obvious area many people jump on is that it can be used to automate lending, but what we’re hearing is that while AI can be used to inform decisions, it shouldn’t be making them. Traditional banks are typically risk-averse, and they certainly don’t want the next PPI scandal on their hands.”

There’s a hunger for what BankiFi classes as ‘pragmatic’ use cases where AI augments humans.

“In our conversations with banks, it’s clear they’re looking through a lens of what AI can be used for, what it should be used for, and what it shouldn’t be used for”

“For example,” explains Hartley, “it can be applied to data sets to improve efficiencies in areas like KYC/KYB, where some of the neobanks haven’t been doing the things they should be doing, resulting in hefty fines.”

Banks can also use AI to pull together reports and track industry trends, helping them to better understand – and then service – the evolving needs of the UK’s small business community.

“If you’ve got the appropriate data, you can ask lots of interesting questions – and that’s something we’ve built for our bank partners,” he adds. “We’ve aggregated data from across the whole of our SME network so banks can ask real-time questions utilising real-time data. This challenges the static model used by credit bureaux, which yields answers based on historical data that may well have changed.”

In what Hartley refers to as a ‘virtuous circle of engagement’, by building data repositories to understand their business customers better, banks can create more tailored propositions as well as market them more effectively.

Unlocking added value

BankiFi believes applications of AI should be rooted in educational, support, and engagement-based use cases. Think of a virtual assistant with real-world benefits to the end user. One example is using agentic AI to help small businesses identify overdue invoices and then send out a reminder of that invoice to the relevant customer. Other examples include support queries turned into searchable AI responses, as well as plugging AI into knowledge bases to facilitate customer self-learning.

“With impending legislation coming up for Making Tax Digital (MTD) for the self-employed, having a bank-branded agentic AI agent to answer questions about what it is, who it applies to, and the obligations it entails, is an appealing proposition for business owners,” says Hartley.

AI also has a role to play when it comes to inclusion and accessibility. Business owners with impaired vision, for instance, can use agentic AI through speech prompts, making their financial lives considerably easier.

“You can access our products through a Chrome or Copilot plug-in without the need to stop what you’re doing and log into your banking interface,” explains Hartley. “You can just have it running in the background and do your banking through voice commands, or through a natural language interface that has the same security and authentication measures as a banking app but more seamlessly integrates into your daily activities.”

Reimagining the trusted bank manager

Ultimately, SMEs want a great digital experience but still value human interaction – or more accurately, a human-like conversation. Pragmatic use of AI provides a route for banks to make this a reality, delivering deeper interactions without the associated headcount costs. By structuring their vast lakes of data, and layering the latest AI models on top of it, mainstream banks can create new customer experiences that catch the eye.

“Agentic AI can now be trained to understand sentiment, and essentially develop personality traits to empathise with customers,” explains Hartley. “It can then more effectively address their concerns about borrowing money, which is the biggest decision many business owners will ever make.

“This isn’t particularly expensive for financial institutions to implement, because you’re not talking about extra hires or additional office space. But it is a great opportunity to reinvent relationship banking for the 21st century.

At Sibos, BankiFi will be launching its new white paper exploring how mainstream banks can apply pragmatic uses of AI to take back their share of the business banking market.

This article was published in Discover Sibos 2025, Page 12-13