CEBU CITY --Fintech solutions are gaining substantial traction among Asia's Small and Medium Enterprises (SMEs) sector emerging as an alternative for external financing and business enhancement, according to a recent survey by Asian Banking & Finance in partnership with Currencycloud, a Visa solution.
"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,” Rohit Narang, APAC Managing Director of Currencycloud shared this insights.
Survey showed that 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, emphasizing the evolving landscape for both banks and SMEs in alternative financing, Narang added.
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 percent of banks not yet in such collaborations expressed their interest in doing so in the future.
Motivated by factors such as digitalization, 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 percent are currently forming partnerships with banks, and 58 percent showed 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. 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. 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 revolutionize the SME sector, driving
progress and prosperity in the dynamic Asian markets. (PR/Photos: Tin Hill/Google Images)
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