Unlocking the Financial Potential of SMEs: Is FinTech the Key?

January 4, 2024

We at Payrow are thrilled to share that we’ve written an article for FinanceFeeds titled “Unlocking the Financial Potential of SMEs: Is FinTech the Key?”. This article focuses on the changing dynamics of the gig economy, particularly for start-ups and freelancers. It underscores the increasing importance of small-scale financial transactions and banking needs while pointing out the significant gap in banking services for small and medium-sized enterprises (SMEs).

Despite their critical role in economic growth, micro and small businesses often remain overlooked and underserved. This oversight is concerning, given their substantial role in driving economic advancement. In our article, we delve into the specific financial needs of SMEs that traditional banks and larger neobanks frequently miss.

You can read part of the review below:

Approximately 90% of all global business entities are SMEs, making up more than half of the world’s workforce, as per data from the World Bank. These small and medium-sized enterprises serve as essential catalysts for the global economy, acting as hubs for innovation, growth, and employment generation.

Micro and small businesses, despite their crucial role in driving economies, have often been overlooked and underserved. This lack of attention towards SMEs is regrettable, considering their significant impact on economic advancement. Recently, during a discussion with a representative from the British fintech company Payrow, we explored the unmet needs of small and medium-sized businesses that traditional banks and large neobanks often fail to address. 

Unique Financial Challenges Faced by SMEs and Startups

According to Payrow, when working with SMEs, startups, and freelancers, they often encounter unique requests from clients, along with their complaints about banks, whether traditional or digital and neobanks not being prepared to meet their needs.

Issues with Obtaining and Processing Financial Data

Challenges arise when it comes to efficiently harnessing data due to the substantial costs associated with technological infrastructure and the requirement for specialised data analysis skills. By effectively utilising data, SMEs can uncover hidden trends and market shifts, enabling them to make informed strategic decisions. This capability can provide them with a competitive edge, boost profitability, reduce expenses, and reshape business partnerships.

While established banking institutions recognise the value of data, they often struggle to use it effectively. According to a report by thefinancialbrand.com, even though 65% of traditional banks consider data a critical asset, many admit to losing clients due to their inability to translate this data into practical insights for small and medium-sized businesses. Furthermore, a mere 20% of investment in business banking is directed towards SMEs.

Fintech firms like Payrow have empowered businesses with the ability to access digital financial services, significantly simplifying their financial management processes. Furthermore, Payrow’s digital solutions have enabled businesses to make well-informed decisions by leveraging data analytics, providing them with valuable insights into their financial operations.

Read the full article on financefeeds.com!

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