Although the bank had previously provided a range of services to SMEs, when the recent financial crisis hit, the bank reduced its SME portfolio. At the time, the SME market was underserved, as it remains in the present; thus, in order to determine the best approach to re-entering the market and how to more effectively serve their existing SME clients, the bank wanted to explore their role in the SME market more extensively. The institution enlisted our strategy consulting services to carry out this task. Our assistance resulted in the creation of an online lending prototype. This led to a 60% reduction in operating costs, a loan initiation cost reduction of 95% less than EUR 300, a projected tripling of its SME lending market share by 2020, and eclipsing the 10% return on investment target by 2%.
For the bank, we not only created a strategy for the SME market, but developed an online lending proposition. In working on these deliverables, we took a phased approach. The first step we made was to establish our vision for the company based on thorough analyses of both the company itself and the market with a focus on market re-entry and SME lending. Secondly, we drafted a minimum viable product (MVP), tested it with customers, and then built a business case.
The MVP was a self-service, integrated solution of the company’s SME products with a strong digital component. A digital dashboard provided financial insight into an SMEs financial situation. The prototype also had a quick and effective online loan application process, and allowed integration with other product offerings on the same platform, such as payments, savings and insurance offerings. Despite the digital-centeredness of the endeavour, functionality where SMEs had the option of seeking offline assistance in the form of a business advisor at a branch was included. Services on the platform were set up in a modular fashion, allowing users to tailor services to their needs.
In addition to the above, we also redesigned operational processes by simplifying risk and finance processes along with digitising and partially automatizing operational procedures.
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