The Growing Trend of Fintech Solutions in Asia's SME Sector
Survey Reveals Asian SMEs' Growing Interest in Fintech for Alternative Financing
Singapore, 08 November 2023 - Fintech solutions are gaining substantial traction among Asia's Small and Medium Enterprises (SMEs), emerging as a potent alternative for external financing and business enhancement. A recent survey by Asian Banking & Finance in partnership with Currencycloud, a Visa solution, has unveiled key trends, emphasising the evolving landscape for both banks and SMEs in alternative financing.
For SMEs, the adoption of fintech solutions is pivotal, providing streamlined processes for accessing finance and leveraging technologies like AI and big data analytics to advance their business. The study underscores the importance of overcoming challenges and fostering collaboration to create a mutually beneficial ecosystem vital for sustainable SME growth in Asia. Access to quick and efficient financing supports SME growth in dynamic market conditions, and is an example of the need for adaptive collaborations between banks and fintech to meet evolving market conditions.
The trends in the financial landscape highlight a significant surge in banks' engagement with fintech solutions, with nearly half already in partnerships and an additional 75% of banks not yet in such collaborations expressed their interest in doing so in the future. Motivated by factors such as digitalisation, global payment solutions, business loans, embedded finance, and fraud risk management, banks are navigating challenges, including compliance issues, cybersecurity risks, and system integration complexities.
Meanwhile, among SMEs, 45% are currently forming partnerships with banks, and 58% show a keen interest in exploring fintech solutions for financing. Despite reported benefits such as improved customer experience and operational efficiency, SMEs encounter challenges in bank partnerships, including compliance issues, heavy financial requirements, and partner integration. Additionally, they face hurdles in fintech partnerships, such as cybersecurity risks, system integration and framework adaptation.
Ultimately, the survey results highlight the increasing interest of SMEs in Asia towards alternative financing options and partnerships with both banks and fintech solutions. As the business landscape continues to evolve, banks and fintech firms must work together to provide innovative, digital-savvy financial solutions that cater to the diverse needs of SMEs. By doing so, they can unlock new growth opportunities and facilitate economic development in the region. This symbiotic relationship between banks and fintech companies holds the potential to revolutionise the SME sector, driving progress and prosperity in the dynamic Asian markets.
Mr Rohit Narang, APAC Managing Director of Currencycloud, shared his insights:
"As SMEs become more aware of the benefits that fintech solutions offer, we're truly witnessing a game-changing shift in how businesses are navigating the financial landscape. The survey results really drive home the point about the incredible potential when banks and fintech firms join forces to tackle challenges and open up new avenues for growth. This partnership, where banks and fintechs collaborate, plays a vital role in nurturing a resilient and prosperous SME ecosystem."
To know more about this transformative trend, download the survey report here.
About Asian Banking & Finance
Asian Banking & Finance is a leading financial magazine in Asia, providing comprehensive coverage and insights into the banking and financial services industry. With a keen focus on industry trends, developments, and best practices, the magazine serves as a trusted source of information for industry professionals, decision-makers, and stakeholders.
Banks, Fintechs and businesses everywhere can make bigger, better, bolder leaps with Currencycloud, a Visa solution.
Currencycloud gives businesses the capability to move money across borders, and transact globally in multiple currencies, fast. Experts at what they do, their technology makes it easy for clients to embrace digital wallets, and to embed finance into the core of their business - no matter what industry they’re in.
Since 2012, Currencycloud has processed more than $200bn to over 180 countries, working with banks, financial institutions and Fintechs around the world, including Starling Bank, Revolut and Lunar. Based in London with offices in New York, Amsterdam, Cardiff, Australia and Singapore, Currencycloud works with partners including Integrated Finance, GPS and Mambu to deliver simple, clear cross-border infrastructure solutions for clients. They are regulated in the UK, Canada, US, the EU and Australia and were acquired by Visa in December 2021.