The fourth industrial revolution has truly transformed the way we work by introducing new technologies, such as cloud computing, AI and machine learning, yet, when it comes to running a small business, technology simply hasn’t delivered the transformation that we’ve seen in other areas. Despite ever-increasing access to innovation and technology, the challenges SME business owners and freelancers are facing today are considerable and haven’t changed much in the last few decades.
This is where Asto, the Santander-backed fintech, saw a major opportunity. The team aimed to bring all of the technology and insights together and build a powerful platform that could transform the way small businesses are run.
Bringing it all together.
The UK is home to more than 5.7 million small businesses that employ 15.7 million people and generate an annual turnover of over £1.8 trillion. About half of these businesses will not survive for more than five years, mainly because of issues with cash flow.
According to Asto, businesses are struggling to grow and evolve because of (1) lack of time, (2) excessive admin, (3) absence of support networks and (4) difficulty in accessing finance. Asto estimates that business owners spend the equivalent of one working month per year on financial and non-financial admin, an enormous amount of time they could spend working on their business, or with their families. This is why Asto focused on building a community and developing a platform that addresses financial as well as non-financial challenges.
There are a great deal of handy tools available online. Yet most of the time these websites, apps and softwares exist individually, which is far from streamlined or simple.
A holistic platform.
In 2018, eBay partnered with Asto in a lending partnership that saw the launch of eBay Business Capital provided by Asto to help improve access to finance for the 300,000 SME’s that trade on the platform. The key realisation for Asto was that there is a two pronged strategy for digital transformation. One is, incumbents have to bring these into the 21st century, e.g. using cloud hosting, and, two - doing disruptive innovation at arms length. This meant innovating outside existing structures, which prompted the move to build a startup outside of the company with access to the company resources but with a different governance.
Asto's team began looking for a flexible loans management solution with the capability to expand into banking products in the future. It was important for Asto to have a platform that is API native and that would offer absolute composability in the design of the ecosystem.
We chose Mambu because we needed a reliable system that is in-line with our ideas of how to build software, and a partner who can and will move fast with us in the same direction.
Asto selected Mambu’s platform because of its agile, composable, API-first nature that allowed the fintech to easily add new microservices and configure the solution where necessary. As a result, Asto was built upon the principles of open banking, an initiative that demands all banks to develop technology that enables its customers to connect their banking data to the financial tools that can help them.
Today, Asto makes access to financial services for the UK’s freelancers and small business owners, simple, seamless and easy to manage on-the-go. Asto’s key differentiator is the ability to go from downloading the app to money in the bank account in less than 10 minutes. In that time they do a full credit risk assessments, credit decisioning and provide the funds.
Currently, London-based Asto is operational in the UK with future plans to expand across Europe.