Challengers banks land £280m for SME focus

iwoca and mmob partner in response to SME demand for post-pandemic credit

20 Sep 2021

Source: mob & iwoca

Open finance partnership platform, mmob, has today announced the addition of one of Europe’s largest small business lenders, iwoca, to its growing network of industry-leading third-party digital finance providers.

The partnership will enable banks and other large financial institutions to easily embed small business loan provision into their digital ecosystems and ensure they can rapidly meet the rising demand for alternative lines of credit from SMEs eager to invest in their growth post-pandemic.

In addition, the secure processing and seamless sharing of customers’ personal and account information between iwoca and mmob’s partners will significantly reduce the time small businesses need to invest in filling out lengthy forms and submitting paperwork. This will help to remove the complexity of applying for a loan and greatly increase the speed at which business owners can access much-needed lines of credit. Something banks, in particular, are well placed to leverage already having many of the relevant data points required for loan applications.

“As big banks reduce their risk appetite, we believe embedded finance is the future of SME lending,” said Colin Goldstein, Commercial Growth Director at iwoca. To that end, “mmob presents an exciting opportunity for us and a win-win for everyone involved in its ecosystem. It will ensure mmob’s commercial partners can quickly respond to the increasing demand for credit from small and medium enterprises, and enable us to further extend our reach into new sectors by embedding our solution within the financial apps and systems business owners use everyday.”

The announcement follows the publication of iwoca’s quarterly SME Expert Index of UK brokers which found that demand for small business loans is rising rapidly. According to iwoca’s Index, over a third (38%) of brokers had submitted more lending applications for unsecured finance in May this year, compared to the four weeks prior. Further, internal iwoca data suggests half of applications through embedded finance partners receive faster decisions and are 58% more likely to convert than direct applications.

“Banks and traditional finance institutions face increasing competition from the new wave of digital challengers who can more readily meet the demand for digital services,” said Irfan Khan, CEO, mmob.  “Our partnership with iwoca is a perfect example of how we are helping financial institutions to efficiently and effectively bridge the gap into complementary services that will help build defensibility against digital competitors by keeping account holders engaged, and driving retention and revenue amongst their key market segments. There has never been a better time to grab the opportunity offered by embedded finance.”

mmob’s open finance platform eliminates the complexity, time, and resources financial service providers need to select and deploy partner-driven services. Through its API, banks and large established fintechs can quickly and easily connect to mmob’s network of third party partners and gain rapid access to new verticals, using just one line of code. Embedding partnerships that once took weeks or months can now be achieved in days.