Small and medium businesses constitute more than ninety percent of the registered businesses in UAE, despite being the largest contributor to the country’s growth and employment, access to finance remains the key challenge for them.
SMEs face many kinds of challenges to meet their financial gap, as they’re not able to secure funds from the legacy lenders as they lack either credit score or fails to meet respective turnover criteria.
This is where the fintech comes into the picture, with which fintech is changing the way an SME was banking earlier. By operating in partnership with banks, fintech has changed the way of opening a bank account, traditional lending, and business finance management.
Ways in which Fintech and bank partnerships improve SME businesses in UAE :
Fintech and bank partnerships not only improve the banking experience for SMEs but also helps SMEs in many ways:
- By assisting them in choosing the right insurance for their business
- By saving their time by auto reconciling their books
- By helping them in managing their finances well
- By providing insights on their businesses
Now banks are not only limited to banking only, with their value-added services they add more value to small businesses.
Access to cheaper capital
Earlier as SMEs were facing problems in getting finance from traditional banks, now this gap has been reduced by the collaboration of banks and fintech.
As banks and fintech develop various lending products for SMEs according to their needs which help SMEs in running their business with efficiency and effectiveness.
Also, these sources of finance are available to every business without any credit history and at very low-interest rates.
Examples of products – cash-flow based lending, revenue-based financing, SME credit card, and Invoice discounting
High operational efficiency
A business can avail of every banking service at the comfort of sitting at their location, which saves a lot of time and cost for any business.
Alternatively which results in higher operational efficiency and also a business can devote their time in their key business matters.
Improved decision making
By leveraging the technology of fintech, now banks can deliver SMEs with insights on their businesses, based on their financial transactions, which are very helpful for SMEs to set their future targets. Also, it improves the decision-making ability of a business and prepares it for any future contingency.
By integrating fintech and bank APIs, businesses can get insights on their expenses within a single platform, and not only these businesses are also getting insights about how much they’re spending on which category, where they can exercise cost-cutting, which cost forms a major part of their expenses and many more.
Digitization is the key
Earlier businesses were required to visit banks physically to perform their day-to-day transactions but now a business can do it all at the comfort of their own as every banking service can be availed from the web or mobile app.
Nowadays also a business can transact cross border without worrying about payment woes, as banks have partnered with the fintech, which makes the cross border settlement a swift process.
Also, a business can receive payments from their customers from many payment modes, which helps them in generating huge sales, achieving collection efficiency, and reducing the cash conversion cycle which improves the liquidity position of a business.
How does fintech add value to a bank’s business?
Fintechs not only add value to SME businesses but also delivers value to banks as well in many ways.
By leveraging with fintech technology a bank can easily cater to a huge customer base within a shorter period.
Now, with the banks going digital, can reduce many costs such as rent, reduced staff, and also can achieve economies of scale.
By collaborating with fintech, banks can develop new features and products as per customer needs, which adds personalization to their services and also can generate new revenue streams.
Also, they’re able to provide their improved services at a low cost and with an improved customer experience.
To achieve its mission to simplify SME business, Hylobiz is looking for doing bank partnerships in UAE. If you’re a bank looking for a fintech partnership, please do reach out to us.
Hylobiz, a business-centric fintech platform focussed on digitizing an SME business, automates the collections and payables of a small business.
It improves the collection efficiency of a business by manifolds, as through Hylobiz a business can accept payments through various modes, can send automated payment reminders to their customers when payment becomes due.
The best part is that businesses can easily integrate their existing ERPs on the Hylobiz platform within few clicks and also there is no set-up cost involved.
With its connected banking services, a business can access its business finance health on a real-time basis on the dashboard, also all the payments and collections are automatically reconciled on a real-time basis.
On the Hylobiz platform, a business can manage its inventory, get notifications about low running inventory. Also, a business can save its funds from getting blocked due to stockpiling, which results in achieving higher liquidity and cash flow efficiency.
Read more about connected banking : https://hylo.biz/connected-banking-with-hylobiz-how-to-collect-payment-faster-for-sme-operations-in-uae/
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