For SMEs everywhere, the impact of COVID-19 was deeply felt, and governments across the globe implemented a range of policies to try and dampen it. SMEs are a critical cornerstone of societal wellbeing and national GDP –in OECD countries, they account for about 99% of firms and 70% of all jobs– but despite their importance, there is only so much support they can get through governmental aid.
Given that said aid is coming to its natural conclusion, SMEs are now turning to other partners to fuel their growth and get them over the pandemic hump. As a consequence, we’re seeing a number of unique trends gaining momentum in the embedded finance sector – from the appearance of new risk assessment modelling techniques to the spread of flexible repayment products.
A new approach to risk assessment
The most forward-thinking of these embedded financing options use a wider range of live data than traditional providers, providing more accurate –and more inclusive– risk assessment. Previously underserved SMEs now have access to financing that can make the difference between growing their business and closing shop.
Merchants are looking for partnerships in new places
For payment providers and e-commerce platforms, financing options can become a cornerstone of building customer loyalty and reducing churn. In fact, 41% of businesses consider their payment service provider a “core relationship”, and look to them first for support of any kind. That’s the kind of opportunity that can completely redefine the market of PSPs.
These are only a few of the trends driving embedded finance this year. This emerging vertical is set to shake up the entire services landscape for SMEs. You can read the latest article to drill deeper into these trends, and explore how you can expand your offering to stay ahead: