In an interview with Specialist Banking, Oliver Prill, CEO at Tide (pictured above), offers us his opinion on the performance of the UK SME banking market, whether he expects more entrants into the business current account space and how being an economist has shaped his career.
Since recently raising £44m in funding, how does Tide intend on using this to capture a larger share of the UK SME banking market?
In the commitments ClearBank and Tide made to the Banking Competition Remedies (BCR) earlier this year, we stated that we would match the £60m grant in upcoming fundraising rounds — this fundraising will support the development of a number of new products and also contribute to Tide’s international expansion efforts.
With regard to product development, this funding will go towards updating the expenses feature to introduce new technologies to help members reduce the amount of time and money spent on expense management. We will also be introducing a payroll tool to allow business owners to pay their staff through the Tide app. The credit function will also be enhanced with proprietary and third-party products.
Why do you feel now is the time for Tide to expand?
Tide has been growing since launching in January 2017, with rapid expansion having kicked off earlier in 2019. Since the beginning of the year, the Tide team has doubled in size to over 250 people.
We are looking to expand more rapidly now as we believe the market is ripe for a digital challenger to come to the fore and offer a new service to small business owners. People are used to digital personal banking and don’t see why they should be getting a poorer and more expensive service for their business banking.
They are realising that they can save time and money with digital products, such as Tide, and are hungry to make a change.
What do you think of the current performance of the UK SME banking market?
The SME market has been dominated by the big five for decades, but the incumbent banks have not created a proposition that works for SMEs — they offer a combination of consumer and corporate banking that doesn't serve the correct purpose.
There is now a real need to break the current oligopoly — SMEs are extremely diverse and need a product that is created for their needs.
This has also been noted by the UK government with the RBS Alternative Remedies fund — and it's exciting to see digital challengers given the support to really shake things up.
Can you see there being many more new entrants into the business current account space?
It's possible that new entrants will enter the business current account space. However, I don't believe they will be able to get close to the market share held by Tide and other digital challengers in the space.
It takes a huge amount of time and investment to develop a viable product and generate the necessary brand awareness to challenge the likes of Tide. If a new challenger were to enter the market, it would have to catch up to where Tide is now, plus the future growth we will see. It’s brilliant to have a diverse business banking market, but it would be extremely difficult for a new player to emerge now.
How did you get into the financial industry?
As an economist, I was always intrigued by the vital role of financial services in a market economy.
If you didn’t work in finance, what would you be doing?
I have a strong interest in politics and current affairs — so probably something in that space.
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