- January 24, 2023
- Posted by: Bastion team
- Category: World News
More small and medium-sized enterprises (SMEs) would use financial products embedded in the platforms of non-financial services companies if they offered more choice.
Non-banking businesses, such as providers of accounting software or invoicing services, are increasingly looking to offer financial products to their SME customers.
They are embedding financial products such as business loans into their services. These are provided by fintech firms through banking-as-a-service (BaaS) platforms. They are often highly personalised offers based on customer data available from the company embedding the offer as a white-label product.
Research carried out by software supplier Finastra and the Confederation of British Industry (CBI) found that 30% of SMEs were interested in using financial products embedded in services such as accounting packages.
But for these services to take off, there needs to be more education and choice. The CBI/Finastra survey found that half of SMEs said they would be unlikely to use embedded financial products and 17% were unsure.
Jonathan McPhail, lead client partner, banking as a service, at Finastra, said one of the obstacles to wider take-up of embedded financial products in the SME business space was a lack of product choice.
“Businesses that have been successful are those that embed the financial products as a white-label product directly at the point of consumption of their SME service,” he told Computer Weekly. “These are very…