Industry Deep Dive: Neobanking for Commercial and SME Banking—Unlocking Value Beyond Retail
Introduction: The Next Frontier in Neobanking
The neobanking revolution has transformed retail banking, but a new and even more complex opportunity is emerging: digital banking for commercial and SME clients. Unlike retail, the commercial and SME segment is marked by diverse business models, complex onboarding, multi-product needs, and heightened regulatory scrutiny. Yet, it remains underserved by both incumbents and digital challengers. For banks and fintechs ready to seize this opportunity, the rewards are significant—provided they can navigate the unique requirements and pitfalls of this market.
Publicis Sapient has been at the forefront of launching SME-focused digital banks, orchestrating rapid builds, modular architectures, and embedded finance solutions that unlock new value for business clients. Here, we explore what it takes to build a neobank for commercial and SME banking, the opportunities for differentiation, and the critical success factors for sustainable growth.
The Commercial and SME Banking Challenge
Commercial banking is at a turning point. Historically, it has lagged behind retail in digital transformation, largely due to the complexity of business customer journeys and the diversity of client needs. SMEs, in particular, face fragmented experiences, slow onboarding, and limited access to tailored financial products. Meanwhile, challenger banks and fintechs are raising the bar for customer experience and operational agility, forcing incumbents to rethink their approach.
Key challenges include:
- Complex Onboarding: Business clients require robust KYC/AML, multi-entity verification, and integration with external data sources (e.g., credit bureaus, company registries).
- Multi-Product Needs: SMEs and corporates need a suite of services—payments, lending, cash management, FX, and more—often requiring bespoke configurations.
- Regulatory Compliance: Commercial banks must navigate a web of regulations, from anti-money laundering to data privacy, across multiple jurisdictions.
- Fragmented Data: Siloed systems and inconsistent data taxonomies hinder the ability to deliver personalized, insight-driven services.
- Legacy Technology: Monolithic platforms slow down innovation and make it difficult to integrate new digital channels or partner solutions.
The Opportunity: Differentiation Through Digital
Despite these challenges, the commercial and SME segment is ripe for disruption. Neobanks that can deliver seamless, data-driven, and modular experiences stand to capture significant market share. The opportunity is underscored by:
- Rising Digital Expectations: Business decision-makers are increasingly digitally savvy, expecting the same frictionless experiences they enjoy as consumers.
- Embedded Finance: The integration of banking services into non-financial platforms (e.g., ERP, accounting software) is accelerating, enabling banks to meet clients where they operate.
- Data-Driven Services: Advanced analytics and AI unlock new ways to anticipate client needs, automate decisioning, and deliver proactive advice.
- Modular, Scalable Architectures: Cloud-native, API-driven platforms enable rapid product launches, easy integration with partners, and efficient scaling across segments and geographies.
Building a Neobank for Commercial and SME Clients: What It Takes
1. Customer-Centric Design for Complex Journeys
Commercial and SME clients have unique onboarding and servicing needs. Successful neobanks design journeys that:
- Streamline onboarding with automated KYC/AML, leveraging third-party data and digital identity verification.
- Enable multi-entity, multi-user account structures, supporting complex business hierarchies.
- Offer tailored onboarding flows for different business types, from sole traders to mid-market corporates.
2. Modular, Composable Architecture
A modern neobank for business clients must be built on a modular, cloud-native foundation:
- API-First: Enables integration with ERP, accounting, and partner platforms, supporting embedded finance use cases.
- Event-Driven and Composable: Supports real-time data flows, flexible product assembly, and rapid iteration.
- Partner Ecosystem: Orchestrates best-of-breed fintech solutions for payments, lending, compliance, and more, allowing for easy swap-in/swap-out as needs evolve.
3. Embedded Finance and Ecosystem Integration
Business clients increasingly expect banking to be embedded in their daily workflows:
- ERP and Marketplace Integration: Seamless connections to ERP, treasury, and e-commerce platforms enable real-time payments, cash management, and lending.
- Multi-Partner Scalability: Modular API layers allow the bank to serve multiple distribution partners efficiently, adapting to different technology stacks and commercial models.
4. Data at the Core: Advanced Analytics and AI
Data-driven insights are a key differentiator:
- Real-Time Data Lake: Centralizes data from all channels and partners, enabling real-time analytics and reporting.
- AI-Driven Decisioning: Automates credit, risk, and onboarding decisions, and powers personalized recommendations for working capital, FX, and more.
- Proactive Client Insights: Dashboards and alerts help clients optimize cash flow, anticipate funding needs, and manage risk.
5. Agile Delivery and Continuous Iteration
Speed to market and the ability to iterate are critical:
- MVP Mindset: Launch a minimum viable product quickly, then refine based on client and partner feedback.
- Cross-Functional Teams: Bring together strategy, product, engineering, and data experts to deliver at pace.
- Partner Collaboration: Co-create propositions with clients and ecosystem partners, ensuring relevance and rapid adoption.
Avoiding Common Pitfalls
Launching a neobank for commercial and SME clients is not without risks. Common pitfalls include:
- Over-Engineering the MVP: Trying to deliver a broad, complex product set at launch can delay time-to-market and dilute focus.
- Neglecting Regulatory Readiness: Failing to engage early with compliance requirements can derail launches and erode trust.
- Siloed Operating Models: Legacy, product-centric structures hinder agility and the ability to deliver seamless, cross-product experiences.
- Underestimating Data Challenges: Poor data quality and fragmented systems limit the effectiveness of analytics and AI.
Publicis Sapient in Action: Proven Success in SME Neobanking
Publicis Sapient has delivered SME-focused digital banks at record speed, including:
- A BaaS-First Commercial SME Bank: Built for 350,000 SMEs, fully functional in nine months, orchestrating 22 fintech partners, with automated operations and a data lake at its core. The platform supports ERP integration, real-time analytics, and modular fintech partnerships, enabling rapid scaling and efficient partner onboarding.
- Strategic Joint Ventures: Partnering with leading banks to create platform businesses that deliver both banking and non-banking services, leveraging cloud-native architectures and global-local expertise.
The Path Forward: Unlocking Value Beyond Retail
The commercial and SME banking segment is poised for transformation. Neobanks that combine customer-centric design, modular technology, embedded finance, and data-driven services can unlock new value for business clients—and for themselves. The winners will be those who move fast, iterate continuously, and build scalable platforms that adapt to the evolving needs of commercial clients and their partners.
At Publicis Sapient, we bring deep experience, proven methodologies, and a robust fintech ecosystem to help banks and fintechs capture this opportunity. From strategy to launch and scale, we partner with clients to build the next generation of business banking—unlocking value far beyond retail.
Ready to build the future of commercial and SME banking? Connect with our experts to start your transformation journey.