Fintech 3.0 – Power to the SME

Resources  /  Published 02 Apr 2021  / 

Upon fintech’s debut, few would have predicted it would be where it is today. What began with a mostly primary focus of payments, lending and wealth management has developed into the age of financial tech as we know it today. Uses of mobile payments, blockchain and cryptocurrency have proven commonplace in everyday life; without such technological advancements, the world would be a very different place, especially in these times of limited personal interaction, having everything at the touch of a button is not only beneficial; for some, it is a lifeline.

fintech b2c trifecta directoryFintech B2C

The fintech industry has experienced tremendous growth rates, expanding US$30 billion from 2008 to 2018 alone, during which time it has been witness to many phases. Implementation of focus towards B2C within fintech reveals the impact of such changing phases; evident through consumer behaviour towards banking, in which services such as PayPal, Starling Bank and Wise (formerly TransferWise) have brought greater control to the hands of the customer, revolutionising traditional money management methods and easing money management as a whole.

The Future Of Fintech

With a predicted annual growth rate of 25% until 2022, the value of the fintech industry is set to rise to an estimated US$309.98 billion next year. Looking to the near future of fintech’s development, many have predicted that with such growth will come a shift of focus from B2C to B2B in what is being coined as ‘fintech 3.0’.

fintech 3.0. trifecta directoryFintech 3.0.

The prevalence of e-commerce infrastructure and platforms such as Shopify have enabled retailers to diversify or even transition to e-commerce retailers, opening them up to wider audiences and potentially global markets.

Accounting software such as QuickBooks and Xero are some of the stand out players in B2B fintech, providing small and medium business owners the ability to manage their accounts and pay for such products with a monthly subscription, reducing business’ expenses and allowing greater efficiency of financial management. Now new players are entering the fintech game.

Noted as one of the UK’s ‘best and brightest’ new fintech companies, CreditEnable is a global credit insights and technology solutions company that provides digital services to help SMEs access affordable credit when they need it. Having raised US$5 million from investors in a seed round, CreditEnable raised an additional US$2 million earlier this year, with which it aims to eliminate the bottlenecks in India’s SME lending landscape.

Such developments in the fintech industry are not limited to benefits within singular markets, economies or bounded by international borders; last month, the global mobile payments service provider SumUp raised €750 million in debt financing which it says will be used to support its merchants in their 33 markets across the world. This will provide global access to innovations and payment solutions that facilitate the improvement and reduction of international operating restrictions. SumUp has also announced their online store and gift card collab orations with Google, Facebook, and Instagram enabling e-commerce SMEs who use SumUp as their payment service provider to broaden their markets.

Looking at the human side of operations, Paycor is an American company that provides SMEs with payroll and human resources technologies and this year, they expanded their product offering to include talent management and performance management modules, equipping HR personnel in SMEs with the tools required to provide advanced business and employee services.

This is just a snapshot of the developments and investments we are seeing into this new stage of fintech’s evolution. As we enter this new phase, we will likely see the removal of more barriers to entry and developments that B2B focused companies are providing SMEs. With such advancements comes the ability for SMEs to improve and solve fundamental, operational and systemic challenges, allowing them to enter and thrive in new markets. This is an interesting and pivotal moment in fintech’s journey and one in which a close eye should be kept on.