EXPERT FORECAST : BANKING AND FINANCE
are approved for financing . It also gives lenders sight of an SME ’ s finances , with accurate data so it can provide accurate financing personalised to the specific SME .
What lies ahead for digital banking with a focus on SMEs ?
The rise of digital technology is transforming SME banking , with personalised platforms and solutions leading the way in how banks can take a customer-centric approach . Looking at the year ahead , regulatory changes , such as the implementation of the EU ' s General Data Protection Regulation ( GDPR ) and the Payment Services Directive ( PSD2 ), are also driving change in the sector . These regulations are aimed at improving transparency , competition and customer protection and will impact Digital Transformation moving forwards . range of financial products and services , including cash management , foreign exchange and insurance .
Banks can have their digital platform fitted with bespoke products that can provide SMEs with more customised solutions that can better suit their specific needs , creating a one-stop-shop . Not only will this further enhance the customer experience , but it ensures SMEs will be served appropriately . They can also provide SMEs with unique advantages , such as more favourable terms or more efficient processes , which can help them stand out in competitive markets . Through a digital platform , a bank can also offer alternative lending options as a substitute to traditional bank loans . These options can include peer-to-peer lending , crowdfunding and invoice financing .
Seamless integration with non-finance platforms : Embedded finance , the integration of financial services products directly into a business ’ products or services , also unlocks new potential for SME banking . It empowers banks with data-driven insights so that they have all the relevant information when it comes to business processes , such as risk assessments for lending and even invoice finance .
Currently , getting invoice financing as an SME can be stressful , with hours spent filling out forms and deciphering costs and fees when they could not get approval – a less than ideal situation for an SME that ’ s facing cash flow challenges . By being able to access invoice financing through a digital platform using embedded finance , it means that SMEs can get an almost instant response on whether they
Artificial Intelligence and automation are also increasingly being used in SME banking to improve efficiency and accuracy . Examples of this currently include chatbots for customer service , Machine Learning for credit scoring and robotic process automation for back office functions , but with further developments in this space we see this going even further as we move through the year . Lastly , SMEs are increasingly focused on sustainability , and banks and financial institutions are responding by offering sustainable finance products and services . This includes financing for renewable energy projects , green bonds and sustainability-linked loans .
Overall , the SME banking market represents a significant opportunity for banks , FinTech companies and other financial institutions . By providing tailored solutions to meet the unique needs of SMEs , providers can tap into a significant and growing market , differentiate themselves from competitors and drive sustainable growth . At SAP Fioneer , we can empower banks and financial institutions with these technological solutions that ’ ll help them create a hyperpersonalised customer experience and serve customers better , faster and at scale with our new SME banking platform . � www . intelligentfin . tech
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