Recent research from Airwallex, the global fintech platform, revealed that US and UK-based SMEs are turning to fintech solutions to help manage their finances and bolster growth amidst the current economic environment. The independent survey of 1,500 SME decision makers across the US and UK found that almost half of US (48%) and UK (42%) SMEs are moving “even more aggressively” towards digital platforms and away from traditional banking services due to economic uncertainty.

Accelerated adoption of fintech platforms

Amid the nearing global recession and predicted market downturn, the research finds the majority of SMEs are relying on digital and fintech solutions to help manage their finances and create more business stability.

Significantly, 91% of US SME decision makers and 85% in the UK would consider adopting a digital/fintech solution over traditional banking services. Of these, over half (52%) of US SMEs and a third (33%) of those in the UK have already adopted digital or fintech platforms. A further two-fifths (41%) of UK SMEs and around a quarter (27%) of US SMEs plan to do so in the next two years.

SMEs’ ambitions for international expansion enabled by agile fintech support

The shift to fintech is underpinning many SMEs’ ambitions for expansion abroad. While many in the UK (68%) and US (82%) see an opportunity to scale or expand to new markets despite the market slowdown predicted ahead, nearly half of US (46%) and UK (42%) SME decision makers do not feel they have a sufficiently agile financial infrastructure to support this expansion.

In fact, 78% of US respondents and 65% of UK respondents say they need the agility of a fintech platform to responsibly manage growth across borders. The appetite amongst SMEs for fintech adoption is reflected by their ambitions for growth in 2023: the majority of SMEs in the US (82%) and UK (71%) are planning to expand into, or further into, foreign markets next year.

Maximising productivity while minimising unnecessary costs

SMEs are also relying on technology to avoid unnecessary costs and boost output:

·      80% of US SMEs and 71% of UK SMEs think the economic environment makes it more important than ever for them to reduce unnecessary expenditures, like costly cross-border transaction fees

·      82% of US SMEs and 71% of UK SMEs are investing in technology and tools to optimise workforce productivity so they can better navigate the predicted market slowdown

Looking ahead, SMEs pinpoint expense management or accounting software (49% in US and 41% in UK) as one of the most important tools to support their business growth and carefully manage expenditures.

Pranav Sood, GM, EMEA at Airwallex comments, “As domestic economies struggle or shrink, SMEs are looking overseas for growth potential. But this is easier said than done. Many SMEs may have solid roots in their home market but lack the infrastructure, licenses, and expertise to enable sustainable cross-border growth. Fast and agile scalability is the holy grail for SMEs turning their attention to new markets, and our research shows they recognise the role fintech solutions – rather than traditional banking – can play in helping them to achieve their growth ambitions.

“In this challenging market, it’s vital that businesses have their house in order before venturing into new markets. This means ensuring the right infrastructure is in place to enable operational efficiency, remain agile and avoid the hidden costs involved when operating globally and moving funds across borders. Ultimately, fintechs are playing – and will continue to play – a critical role in businesses’ growth into new markets. Providing easy ways to connect payment and money movement solutions across different geographic regions will not only support SMEs as they hunt for growth opportunities in new markets next year, but also set them up for success as they continue to expand their global footprint in future.”