Banking tech solutions platform BankiFi has released a whitepaper that outlines the challenges banks and small businesses are facing in the current economic climate when it comes to adopting digital solutions.
In partnership with RedCompass Labs, the report, titled “SME Banking Channels: converting a money pit into a business opportunity,” reveals that SMEs are spending approximately $225bn annually on payments and accounting services.
In the US, small businesses make up 90% of all businesses in the country and employ roughly half of all Americans. Despite most of them initially looking to their financial institutions for payments and accounting services, these businesses are increasingly turning to third-party service providers.
It also reveals that, between technology costs and staffing costs, banks regularly struggle with the cost of ownership for their in-house digital channels, but do show signs of innovation, with an increase in Open Banking adoption growing by 30%.
The report concludes by noting that banks are able to eliminate these costs by partnering with external service providers to offer “top-of-the-line” technology at the best price for the bank.
“We’re seeing a real crisis for both banks and small businesses,” said Keith Riddle, CEO of BankiFi Americas.
“There is plenty of demand for payments and accounting services among small businesses, but banks are disincentivized to offer those solutions given the current state of the market.
“Through external partners like BankiFi, banks can have the best of both worlds, offering the best technology with minimal cost to the bank itself.”