Innovation and the fundraising marketplace

Russell Gould, head of Wonga for Business, discusses how innovation has revolutionised the business lending market.

Russell Gould, head of Wonga for Business, discusses how innovation has revolutionised the business lending market.

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Russell Gould, head of Wonga for Business, discusses how innovation has revolutionised the business lending market.

For businesses, it’s never been more important to mark yourself out from the crowd. In today’s globalised business environment, products and services can quickly start seeming indistinguishable. That’s not good if you want to build your business so it’s a sector leader one day. In the tough reality of the global marketplace, being agile and thinking differently are essential for businesses that want to maintain an edge over the competition. Firms need to be constantly listening and adapting, both to the latest technology developments and to the demands of those who matter most – the customers.

By innovating and challenging the status quo, we can disrupt and revolutionise markets that have been resting on their laurels and relying on archaic ways of operating. We need to think about what people have grown to expect, in terms of choice and real-time customer service. The success of companies such as Amazon, eBay, Google, Facebook, Betfair and Zynga show that people want quick access to products, information and entertainment around the clock. They want to shop, trade, read and even match-make when it suits them, not when it suits the service provider.

That’s not to say the basics that underpin any good business should be ignored. Being transparent, responsible and engaged are as crucial to the success of any small business as ever. However, the modern customer living in the globalised age is more demanding than ever before, and has more opportunities than ever to switch providers if unhappy. This means small business owners need to put in those extra hours. Make sure you do that extra market research to understand what your customers REALLY want.

Fed up with traditional finance

For example, the research we held before launching our consumer loans site, wonga.com, taught us consumers were disillusioned with the traditional financial services on offer to them. Consumers were annoyed at being hit by hidden charges and by being effectively forced into agreements with financial service suppliers that simply didn’t suit them. Consumers told us they want more control over managing their money, and they want access to it on their own terms.

Based on this research, we set out to develop the world’s first automated and uncomplicated loan service, where consumers could complete an application entirely online and have funds sent to their bank account in 15 minutes, 24/7/365. On wonga.com, applicants can choose how much money they want to borrow and how long they want it for. Our systems, developed in-house, also ensure we lend responsibly. The total cost, which is what people really want to know, is displayed upfront.

When thinking about what product was next for us (we really are 24/7/365 at Wonga!), we saw an opportunity in business lending. We knew young, entrepreneurial companies represent our best hope of economic recovery. We knew many were struggling to grow because they couldn’t get quick access to the credit needed to cope with everyday challenges, such as late payment by customers.

A big money market 

Speaking to entrepreneurs taught us that small business lending is effectively broken, and we spotted the opportunity to use our technology platform to offer a real alternative. According to figures from BIS, small and medium-sized businesses account for nearly 60 per cent of private sector employment, employing nearly 14 million people, and have a combined annual turnover of around £1,500 billion. That’s a lot of small businesses often looking for the right way to borrow relatively small sums for less than a year, but frequently finding it difficult to do so.

We believe businesses face all sorts of challenges that can easily be solved if quick access to short-term funds is available – whether it’s late payment, unexpected expenses such as computer repair, or just the need to benefit from a well-priced opportunity before it disappears. In such circumstances, a time consuming loan application, and presentation to a bank manager, is the last thing a business needs. Wonga for Business offers a fast and flexible alternative, without the prejudices sometimes experienced in a face-to-face pitch for funding.

At Wonga, we always try to think differently, conducting our own research and planning in order to develop products that customers really want, and which can be delivered using the very latest technology. So, for businesses who want to succeed in today’s challenging market, the best advice is to always look to challenge, disrupt and innovate. By adopting that mindset, while always listening to what your customers want and leveraging technology to improve your offer, you’ll find yourself on the path to business success. You’ll have to work hard too, but who said everything was easy!

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