Video: 10 Minute IT Jams - Who is vcita?

Small businesses are going digital. The push for micro and small business owners to embrace technology has never been stronger.

Adi Engel, Chief Marketing Officer of the small business software provider Visita, recently spoke about this transformation and the changing relationship between small enterprises, technology, and the financial sector.

"We live in the space of helping small businesses and micro businesses digitalise their day-to-day operations," he explained. From managing appointments and clients, to getting paid for services, Visita aims to streamline every aspect of small business management. "That would be an app that basically helps them with time management, their client management, and getting paid for the services that they provided."

The move towards digitalisation is not just a nice-to-have - for many, it is essential to survival in a rapidly evolving business environment. Engel describes it as "an overall solution to help them get on board of that digitalisation wagon."

The company operates squarely in the fintech and non-traditional bank space, working closely alongside banks. "Everyone in the ecosystem has a very strong incentive to get SMEs to digitalise themselves," Engel said. The benefits are clear for all parties involved.

"The SMEs themselves get better efficiency, better transparency, and create better client engagement and better client experiences," he said. "And it works better for the traditional banking industry and the neobank industry because they could get the data, the exposure to those small businesses that potentially were kind of uncharted territory for them before."

The relationship between people and banks is changing fast, largely due to major technology shifts in financial services. Engel pointed out that visiting a physical bank is no longer appealing for many, especially younger generations. "I don't think anyone was particularly keen on the physical banking aspect," he said. "Banks were very happy to pull back on their community presence."

For micro entrepreneurs and flexible workers, the reduction of face-to-face interactions at the local bank posed a unique challenge. "This created a bit of a vacuum," Engel noted. "If I am not able to show up to my physical bank at the corner of my main street and the banker there knows me and therefore knows to extend a line of credit to me, then how do I actually engage with a bank?"

Digitalisation of banking meant that SMEs also needed to digitalise to stay relevant. "Otherwise they simply don't speak the same language and they simply don't live in the same platform," Engel explained.

The pandemic accelerated this trend, making digital solutions not just preferable, but necessary. When asked about small businesses' move to digital spaces - especially freelancers and solo entrepreneurs - Engel said the transition was not always straightforward.

"It became a bit of a hype. At some point everyone was telling you: 'You have to go online.' And what does that mean? A lot of people were like, 'Am I supposed to now become an Instagram yoga teacher? How do I monetise that?'" he reflected.

He emphasised the importance of breaking down the process for each profession. "If I am for example a financial consultant, going online for me is a completely different thing than for a yoga studio owner or a hairdresser," Engel said. It's about finding the right solutions for each sector.

A common need did emerge, however: the drive to go cashless and to pay and get paid remotely became universal. Engel said: "That is something that we've seen a huge increase with, and now it's about, you know, yes, can you send someone a link to get paid? Yes, you can. But can you make a business logic out of it? When is it sent, who are you sending it to, did they remember to pay, did you remember to follow up with them? All of those things, we can help with automation of it, we can help with building kind of a business logic out of it."

Looking at the wider financial ecosystem, Engel was clear that while fintech firms are often celebrated for innovation, more work needs to be done to communicate technical advances to customers and to collaborate effectively with traditional banks.

"Traditionally it's considered, you know, the fintechs, they're the innovative ones, they bring in the great ideas, they bring in new SaaS models into the industry," he said. "That's all great, but how are we communicating all of this to the customer?"

He underlined that small business owners often behave just like consumers - and may not be equipped to make complex, purely logical decisions about technology. "They don't have an IT department, they haven't created an RFP to choose the perfect application for them," Engel said. "So it's on us to really kind of make the journey accessible to them, to clarify the value to them."

Engel also spoke about the need for active partnership with banks. "It's also on us to collaborate with banks in the way that will be suitable for them. It's not about, you know, will they come our way, it's about us meeting them more than just in the middle. We have to find our way to them, because eventually they will deliver the trust of the customer, they will deliver the reach, and hopefully they will trust us to deliver the product," Engel said.

The digital journey of small businesses appears far from over, as fintech companies and banks alike continue to evolve. For Engel, the key is clear communication and genuine partnership across the financial ecosystem.

"As we move forward, success will depend on making digital tools simple, transparent and tailored to the real needs of each business," he said.