Top fintech innovations to accelerate SME growth

Financial technologies that SME owners stand to benefit from the most as they build and expand their businesses.


Financial technology (fintech) adoption has become common amongst consumers and businesses alike in recent years. And with the pandemic driving accelerated digital transformation, mobile-first banking and digital payments have now become the norm in Southeast Asia[i]. More and more partnerships are being established between traditional banks, insurers and fintech disrupters to extend their reach and tap fast-growing markets.   

But while financiers and service providers are leveraging technologies such as machine learning and artificial intelligence (AI) to help them do better business in the form of loan decision-making, claims management, and treasury processes, what fintech solutions are small and medium-sized businesses (SMEs) adopting to boost growth?

Small businesses have less time, money and human resources to spend on building their own custom tech solutions—which is why they look to fintech as a means of outsourcing complexity and expertise. Application programming interfaces (APIs) and other low-code, plug-and-play solutions in general are very valuable for SMEs as they allow them to get digital solutions up and running as quickly as possible, with minimal upfront capex and impact on operations. In fact, 53%[ii] of SMEs say they choose to use fintech solutions precisely for their ease in set-up, use and configuration.

Here are five fintech innovations that are making a big difference to SME business owners.

1. Marketplace lending platforms

SMEs face unique funding challenges compared to larger enterprises—the finances of smaller businesses are typically high in complexity yet low in scale, making it difficult for them to get approval for traditional financing, whether that’s loans, equity or trade credit.

This is a business challenge that fintech was built to solve. Non-traditional financing platforms such as Funding Societies, SmartFunding and FundedHere offer SMEs alternative access to capital in the form of peer-to-peer (P2P) lending, invoice financing and equity crowdfunding respectively, making it possible for business owners to achieve next-stage growth.

2. Integrated POS systems

To deliver top-notch customer experiences and establish their competitive advantage, SMEs are increasingly relying on digital point-of-sale (POS) management systems that can be fully integrated into their sales channels. This is especially critical today as businesses expand to e-commerce and omnichannel retail.

Traditional or non-integrated POS systems are fragmented across different functions such as payment, inventory management, customer relationship management (CRM) and more, and tend to require manual syncing to ensure that all data across different platforms and software tally. Integrated POS systems like DBS MAX, on the other hand, facilitate seamless, automatic transactions, tracking and fulfilment, allowing SME owners to reduce operational costs while improving the customer experience.

3. Digital wallets and BNPL

It’s estimated that about 73%[iii] of Southeast Asia’s population remains unbanked, which means more than seven in 10 potential customers in the region don’t have access to traditional banking facilities such as savings accounts or credit cards.

Fintech solutions like digital wallets (which include e-credits and cryptocurrency payment options) and Buy Now, Pay Later (BNPL) services can help SMEs tap into a wider pool of customers, by providing alternative payment methods for goods and services. In addition to financial start-ups such as Atome and hoolah, non-financial tech giants including Grab and Gojek are also breaking into this space—which speaks to just how big the potential gains are for this technology.

4. Automation, analytics and AI

Some of the more value-added accounting software solutions in the market integrate automation, data analytics and/or AI to facilitate faster invoicing, visualise accounting data and automate paperwork. On top of basic financial tracking and payments functions, such fintech solutions streamline time-consuming auditing processes and offer additional business benefits such as predictive analytics for improved cash flow forecasting. These benefits are compounded for cloud-based accounting solutions that can integrate or consolidate information from other platforms such as CRM or customer service portals.

5. Blockchain

Blockchain in fintech takes many forms, most notably in payments solutions and smart contracts for real-time cross-border multi-currency payments. But another way that SMEs can benefit from blockchain is to use it for improved supply chain resiliency and transparency.

Companies like dltledgers and DiMuto offer blockchain-enabled and AI-powered supply chain management solutions that help track and automate complex, time-consuming trade processes. These platforms even feature access to trade financing, thanks to immutable trade documentation and digital paperwork that substantially reduce financial costs related to delays and human error.

Pinpoint the problem before hunting for a solution

When it comes to picking the right fintech solution, start by identifying the problem that you want it to solve. It’s easy to get swept away by the latest trends or the hottest new innovations, but it would be a mistake to think that the newer the technology, the more benefits it will bring your business. 

If your operations don’t deal heavily in trade, for example, or if you have minimal cross-border transactions to make every month, then you probably won’t get the most out of a blockchain-powered supply chain management system. Or if your business model is services-based and B2B, then you won’t benefit much from a sophisticated POS system or automated invoicing solution. But if you find yourself spending too much time on administrative or operational tasks and not enough time selling, or if you realise your accounting platforms are out-of-date, fragmented or non-compliant with the latest data privacy standards, then you may want to look at some fintech solutions to help you out.  

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