How a global FinTech captured growth in the SME segment

Fast and agile digital financial services providers, unencumbered by legacy technology, have been swift to enter the market and serve SMEs’ evolving needs. They are adopting new models and propositions to expand connectivity and integration with businesses. These range from Banking as a Service (BaaS), which embeds financial services directly into marketplaces, to offering SME-tailored product sets. However, with no single provider offering a comprehensive solution, 33% of SMEs are relying on more than four financial service providers.³

A global FinTech was keen to take advantage of this momentum to grow its market share. The company wanted to focus on SMEs specifically and offer a comprehensive solution to become the sole financial provider for its clients. The challenges it faced were threefold:

1. While the company had a presence in many countries, it lacked market penetration as well as small business expertise in some markets.
   
2. It had limited expertise in the products and services it wanted to add to its offering.
   
3. With a lack of clear winners among traditional financial providers serving SMEs, the global FinTech had to think beyond the normal financial services silos to create a holistic and integrated solution.

To move forward with this crucial business decision, the FinTech engaged EY teams to help define a market entry strategy and a core Treasury-as-a-Service (TaaS) proposition that helped address SMEs’ most pressing challenges via a client-facing platform. The company also required a roadmap for launching, scaling and enhancing the TaaS offering in markets with the greatest growth potential.

An existing working relationship meant that the client was confident that the EY teams understood the FinTech landscape, and could blend insight and strategy, with proven execution experience.

Crucially, along with its experience in banking and FinTech, the EY teams brought the voice of SMEs to the table. Along with deep sector knowledge, the team drew on insights from the EY Global SME Survey to provide the client with a detailed, top-down view of SMEs, their pain points and opportunities and, most importantly, their shifting expectations of financial providers.

A global project requires a global team. At the start of the project, EY teams brought together professionals from the US, EMEIA and Asia-Pacific, with a support layer in India providing research, insight and sector knowledge.

The team began with a hypothesis-based approach, drawing on market insights to identify which countries, products and services should be prioritized for launch. Using a market assessment framework, the team looked at the FinTech’s footprint in a cross-section of markets, the value-add and growth opportunities, as well as key challenges and pain points. In parallel, the team considered core and incremental TaaS offerings, focusing on finding synergies between liquidity, cash flow and funding solutions and the client’s existing capabilities.

Integration proved to be a major challenge. Reviewing the client’s extensive, but fragmented, portfolio of applications, the team identified that there was a trade-off to be made between utilizing existing applications and internal platforms versus speed to market. The solution was brought together in an ecosystem, where the client would build some elements in-house, some would be bought in and bolted on, and others would be provided by third parties.

Innovative technology was fundamental to helping deliver a more SME-centric experience. The TaaS solution is predictive and event-driven. If a business is running out of cash, a traditional provider might offer a line of credit or an inventory financing loan. By contrast, the platform would be able to recognize a cash shortfall and, based on its understanding of the business and its inventory, might recommend factoring in their outstanding invoices instead.

Another important but nuanced innovation was defining the proposition in a more SME-centric way. Rather than focus on internal or jargon-heavy product categories, the EY teams reframed the offering in terms of “manage your business,” “manage your employees,” and “manage your outreach” — language that resonates with business owners and suggests clear benefits.