What were the push-pull factors driving certain SMEs in one survey towards digital transformation and fintech solutions?

In a April–June 2023 survey of respondents* from the Philippines (44%), Australia, India and Pakistan (11% each), Singapore, Bangladesh, Cambodia, Malaysia and Taiwan (4% each) representing banks (54%) and small- and medium- sized enterprises (SMEs, 46%) on fintech partnership matters, some trends were observed.

Nearly half the banking respondents were entering partnerships with fintech providers, with 13% having sought solutions specifically for treasury management, primarily focusing on digitalizing processes and services.

Banking respondents also expressed interest in exploring collaborations in financial planning, remittance services, and foreign exchange management — reflecting an ongoing digital transformation trend to achieve greater efficiency, customer experience, and cost savings.

SME findings

Of these smaller businesses, 54% of respondents indicated inclining towards partnering with fintech solutions. Three trends were observed in the survey data:

    • They partnered with banks primarily for global payment solutions, remittance services, and account openings, and expressed interest in fintech solutions for credit lines, account management, mobile banking/wallet services, business loans, and global payment solutions.
    • The respondents’ partnerships with banks were indicated as enhancing customer experience, operational efficiency, account management, and foreign exchange management. Fintech partnerships were cited as beneficial, with room for further improvement needed to meet their diverse needs better.
    • SMEs indicated that their reasons for looking into alternative financing was due to banks’ traditional approach, slow processes (including strict regulations and compliance), and also due to “expensive partnership”

The survey report asserts that banks and fintech firms holds the potential to revolutionize the SME sector, in the Asian markets (consulting 23%; commercial printing 15%; food industry 15%; automobile 8%; hospitality 8%; investment management 8%; manufacturing 8%;, mobile financial services 8%) and solutions analyzed.

According to Rohit Narang, Managing Director (APAC), Currencycloud, which commissioned the survey, as SMEs become more aware of the benefits of fintech solutions, banks and fintech firms can 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.” 

* 54% of the SMEs had 49 staff and below; 23% had 50–249 staff