SMEs: Analyzing 2023 And What to Expect in 2024

January 3, 2024

We start 2024 reflecting back on the last year and looking forward to all the new things this year brings with it. To that end, industry leaders and Fintech CEOs from all over the world sat down with The Fintech Times to discuss what 2024 has in store for small and medium businesses (SMBs) in terms of management, personalized banking, alternative lending and digital banking platforms.

Here are some snippets of those conversations:

According to head of marketing and sales, business blueprint and banking at American Express, Brett Sussman, the data for SMBs in 2023 shows small business owners are constantly working to overcome obstacles and improve their businesses. He adds that cash flow management tool consolidation impacts profitability in a positive way, and 71% of correspondents said it impacts efficiency positively. With all the data behind them, this 2024 it is expected that cash flow management will continue to be a focus point.

Small businesses are going to continue to need streamlined management with enhanced cash flow tools, including analytics, funding, and banking, to unlock new efficiencies.

He added that many correspondents admitted to turning down opportunities for growth because of their doubts on the hold they have over cash flow management, therefore focusing on improving it will have a positive impact on businesses.

Wamo’s CEO, Yanki Onen, expects 2024 to see a “huge shift” in the business banking sector. According to Onen, SMEs did not have a great 2023, and this leads to the need for tailored support from banks. This year, SMEs will be searching for bank partners that “truly understand their problems”.

As entirely digital products are becoming the new norm, human touch and empathy will define the new era of business banking, empowering entrepreneurs and SMEs to thrive.

According to Sonovate’s co-founder and co-CEO, Richard Prime, one of the biggest challenges this year has been the decrease of lending to SMEs by high street banks, and this opened the door for alternative lenders: 40% of SMEs are turning to them, with 70% of these businesses admitting they would have had to close shop if it wasn’t for these lenders.

Over the past year, these lenders have already proved themselves as successful disruptors to incumbents and a vital source of funding. Fintech lenders are no longer an alternative option for SMEs, instead they will increasingly be top of mind in 2024.

Bluevine’s CEO and founder, Eyal Lifshiz, predicts that small businesses in 2024 will  lean on digital banking platforms designed with small businesses in mind for all of their banking needs, and that they will rely on these for digitalization, savings and general efficiency. He adds that SMEs will rely on banks that can offer an app that can offer customers an all-in-one, and that saves them resources to be able to invest in other business aspects.

Simply Asset Finance’s CEO, Mike Randall, points out the “key pressures” many businesses are trying to alleviate during the course of 2024. He added that for some years, UK SMEs have faced “unparalleled hardships”, taking in account the pandemic, global inflation, and economic stagnation. Despite all of this, business owners are optimistic about the future. And while this is encouraging, it is imperative they are not “failed” now, and that UK SMEs not only need support and funding, but they also need to be comfortable asking for it and using it. This is because thriving small businesses are capable of helping the economy heal.

Businesses shouldn’t need to hold back cash that could have been invested in growth in order to keep the lights on. Crucially, both their own and the wider economic situation may have shifted since they last structured their financing, meaning that it may be possible, beneficial, and in fact advised, that they restructure their debt.

Bottom line is, SMEs are important to the economy, and in turn, alternative lenders have the unique position to help them. Investment in new technologies and processes are incredibly important, and the consolidation of services will make it so SMEs can truly focus on what’s important: seizing growth opportunities. 

Want to learn more? Check out The Fintech Times’s full write-up here.

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