Airwallex has detailed the growing demand for cloud-based financial services with more than 80% of SMBs looking to switch away from traditional banks.
A report from the firm, which was jointly produced by consultancy Edgar, Dunn & Company and Airwallex, looks to shine a light on the financial services pain points faced by SMBs.
The data described 82% of SMBs globally as being overlooked by banks and willing to switch their current banking provider if their existing software platform or marketplace offered a like-for-like alternative.
Shannon Scott, SVP, Global Head of Product at Airwallex, said: “Seamless cross-border payments are essential for digital-first SMBs, but our research highlights that these businesses think banks are missing the mark by not offering the right solutions to support their global ambitions.
“Software platforms and marketplaces are well-placed to fill this gap because they have closer relationships with their customers and understand the nuances of their industries. For example, if an eCommerce marketplace is interested in providing loans to their sellers, having visibility over their sellers’ payments processing will be essential to offering pre-approved funds or making well-informed risk assessments.
“Industry data consistently highlights the positive impact of embedded financial services on a software as a service (SaaS) company’s valuation and market capitalisation. The opportunities are huge, but untapped, for software providers to better serve customers with tailored offerings while unlocking new revenue streams for themselves.”
At the heart of SMB’s decision to switch would be an openness to accessing cross border payments, as the global economic
The findings demonstrate a clear opportunity for software platforms or marketplaces such as eCommerce, customer relationship management (CRM,) or expense management platforms to better serve SMB customers, and create new revenue streams by offering embedded financial services – particularly when it comes to global money movement and payments.
It comes as SMBs are also experiencing challenges when paying out funds to vendors, suppliers and employees, including delays in processing and disbursing payments (48% — rising to 58% in Australia.
Traditional banks are considered least likely to meet the financial services needs of SMBs (44%), whereas 64% of respondents believe software platforms or marketplaces that offer embedded financial services can better serve them.
According to the report, this sentiment was consistent across all regions, with the highest appetite in Australia (76%). The research highlights that SMBs are in search of streamlined solutions tailored to the specific needs of their industry, which is something that vertical software providers would be well-placed to offer.
