Mastercard, Strands Partner On AI-Powered SMB Banking Platform For Banks

Mastercard and EU FinTech Strands are collaborating on a cash management and corporate payments platform for banks, designed to address small business (SMB) needs.

A press release on Monday (July 9) said the companies are deploying artificial intelligence (AI) technology, Strands Business Financial Management (BFM), to develop the solution, enabling small businesses to forecast cash flow, analyze finances and gain personalized recommendations on services from their banks. The solution will integrate Mastercard‘s digital payments technology, the firms noted, and include support for accounts payable, accounts receivable, budgeting and other processes. AI and machine learning technology will be able to help predict cash flow, expenses and balances.

In a statement, Strands CEO Erik Brieva said small businesses, despite their potential as a revenue source for banks, are often left to rely on banking services and products designed for consumers.

“Our in-house research shows that 61 percent of [SMBs] place cash flow management as one of their top-three priorities to help them secure their financial future, but the banking solutions offered today by issuer banks do not address those unique requirements,” Brieva stated.

Following the rollout of the Strands BFM, the solution will also integrate Mastercard In Control, a commercial card spend management solution, as well as Mastercard Merchant Match Tool and Mastercard Easy Saving.

Strands released a research report last year that found small businesses in the U.K. widely consider their banks to be utilities, not business partners. Banks largely agreed with that sentiment, too, the company found.

“Banks, in many cases, have rated themselves as a utility provider, which is a very strong statement,” said Pau Velando, general manager of finance at Strands, in an interview with PYMNTS. “You wouldn’t normally hear a bank say this. Banks don’t like to recognize that they are a utility provider rather than a business partner.”

The report also found that banks are struggling to remain competitive with their SMB customers who are offered newer, innovative technologies from FinTech firms, meaning traditional financial institutions (FIs) are missing out on revenue opportunities, Strands said at the time.