As reported by SME Web, SMEs embrace embedded finance, a game-changer offering seamless solutions, automation, and data-driven insights for empowered and efficient growth
For several years, back-to-back crises have made growing and frankly, surviving as a business a challenge to say the least. Turbulence has been a constant, meaning SMEs have had to be agile and flexible to navigate unprecedented challenges.
The sophistication of technology and innovative software has helped SMEs streamline operations. However, one issue remains – access to financial services. External sources of finance are becoming less accessible and affordable for SMEs. As the hurdles get higher, alternative sources are in demand. That’s where embedded finance comes in.
Embedded finance, the seamless embedding of a financial product into a non-financial space, is gaining momentum, a staggering £230.48 billion windfall to be exact. However, this new route to market for financial products has been targeting consumers. With 5.6 million SMEs in the UK economy, the lack of digital banking and other financial services tailored to SMEs is a missed opportunity too big to ignore.
It’s time for SMEs to be at the centre of the revolution.
Fluctuating financial demands
The impact of SMEs on the UK economy cannot be overstated. Yet, they are overlooked by traditional financial institutions and face complex, time-consuming finance processes, high fees, and limited access to credit.
Traditionally, SMEs have struggled to access a wide range of financial services that meet their unique needs compared to larger businesses. Embedded finance is a game-changer for SMEs. It bridges the financial services gap by offering SMEs access to products and services directly within their existing business tools and platforms. Imagine a small retailer seamlessly processing payments, managing payroll, and applying for a business loan, all from a single platform. Merging services simplifies financial management, reduces costs, and enhances overall efficiency.
Furthermore, embedded finance solutions can be designed with the specific needs of SMEs in mind. They offer scalability, flexibility, and affordability – results which are critical for smaller businesses with fluctuating financial demands. Whether handling everyday transactions or planning for expansion, SMEs are empowered by these solutions to make informed financial decisions and grow with confidence.
Putting SMEs first
SMEs have long fought against a lack of support from their banks, with (73%) saying they struggle to secure a meeting with their bank or financial manager, leading to delays in their business plans. Embedded finance can automate the routine steps when engaging with banks by integrating financial tools seamlessly into operations. For example, they can set up automated invoicing, track expenses, and reconcile accounts in real-time. These automation features save time and reduce the likelihood of costly human errors.
Moreover, embedded finance solutions provide SMEs access to sophisticated data analytics tools. SMEs can gain deeper insights into their financial performance, customer behaviour, and market forecasts. For instance, they can analyse sales trends, identify loyal customers, and optimise inventory management to respond more effectively to changing market conditions.
