Surging demand for embedded finance among SMEs

SME Banking
26/10/2023 News

Airwallex, a leading global payments and financial platform for modern businesses, recently conducted a survey in collaboration with Edgar, Dunn & Company, which revealed a shift in SMEs' preferences when it comes to financial services. Over 80% of small and medium-sized businesses (SMEs) are looking to transition from traditional banks to cloud-based financial services.

SME Banking
12 Dec 2023
12/12/2023 Best Practice Forum

Embedded finance for SMEs: Financial fusion revolution

Traditional banks falling short

The survey exposed the pain points SMEs face with traditional banks, with 82% of SMEs globally (86% in the UK and US) feeling neglected. They are open to exploring alternative solutions from their existing software platforms and marketplaces, such as cross-border payment processing, business bank accounts, foreign exchange, and treasury services.

Opportunity for software platforms

This shift presents an opportunity for software platforms and marketplaces, like eCommerce and CRM, to provide embedded financial services. By doing so, they can better cater to SMEs' needs and create new revenue streams, particularly in global money movement and payments.

Challenges with cross-border payments

SMEs encounter various inefficiencies with international payments, including long processing times (45%) and high transaction fees due to forced currency conversion (41%). Delays in processing payments (48%) and complexity in managing multiple payout methods and currencies (47%) are also common challenges.

SME confidence in software platforms

Traditionally, SMEs have relied on banks (81%) for financial services, but they often find these services unsuitable. As a result, 77% of global SMEs are considering or undecided about switching to new payment solution providers. They see software platforms and marketplaces as better suited to their needs.

SMEs willing to invest

SMEs in China (93%) and the US (88%) are enthusiastic about accessing financial services through their software providers. A significant majority (76%) of SMEs are willing to pay more for a one-stop-shop provider that can support their financial needs as they expand their international operations.

In summary, the increasing demand for embedded financial services among SMEs offers a significant opportunity for software platforms and marketplaces to revolutionize the way businesses manage thei

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