SMBs go digital – Opportunities for fintechs and financial services

The latest Visa Global SMB Trends Report sheds light on the trends, challenges, and opportunities shaping this segment, providing a roadmap for fintech and financial service providers to capitalise on the SMB revolution.

The growth of digital platforms

SMBs are increasingly leveraging B2C and B2B platforms to drive growth and efficiency. Over 50% of gross merchandise value (GMV) from top eCommerce platforms now comes from SMBs. This shift is bolstered by digital on-demand service marketplaces and the proliferation of “company-in-a-box” solutions offering bundled services such as business accounts, payroll, lending, and payment tools.

For fintech players, this presents a significant opportunity to integrate services like payments, lending, and analytics into these ecosystems. The growing reliance on Software-as-a-Service (SaaS) during the pandemic further underscores the demand for seamless, scalable, and industry-specific solutions.

Embedded finance and the rise of neobanks

Embedded finance has emerged as a pivotal driver of SMB growth, with the market projected to reach £83 billion by 2029. Fintech companies are uniquely positioned to meet this demand by offering integrated tools that simplify financial operations. From cash management to supply chain financing, embedded solutions enable SMBs to access capabilities traditionally reserved for larger enterprises.

Neobanks, meanwhile, are expanding their focus on SMBs. Mobile-first platforms offer fast onboarding, flexible spend controls, and simplified lending processes, addressing pain points often overlooked by traditional banks. With SMB-focused neobanks set to capture 25% of the market by 2025, competition in this space is intensifying, particularly in Europe and emerging markets across Asia and Latin America.

Payments and lending innovation

The success of alternative payment methods in B2C transactions is now spilling over into the B2B landscape. E-wallets, real-time payments (RTP), and QR codes are gaining traction as SMBs seek cost-effective, secure, and efficient solutions. By 2025, e-wallets are expected to dominate all commercial payments, highlighting their growing importance.

Digital lending is another area ripe for innovation. With traditional lenders often hesitant to serve SMBs due to perceived risks, fintech lenders are stepping in with alternative credit models. By using data from cash flow, bill payments, and even social media, these lenders offer faster decision-making and higher approval rates. The global SMB digital lending market is projected to grow from £24 billion in 2018 to £132 billion by 2025, signalling immense potential for fintech disruption.

Risk management and HR technology

The report highlights a growing need for SMB-specific risk management solutions. Cybersecurity threats, operational interruptions, and compliance challenges are driving demand for novel insurance models such as embedded and on-demand coverage. Embedded insurance alone is projected to reach £22 billion by 2027, providing fintech companies with an opportunity to design targeted solutions that integrate seamlessly into SMB workflows.

Similarly, HR technology is undergoing a transformation, with SMBs increasingly adopting digital tools to manage payroll, benefits, and compliance. The rise of Earned Wage Access (EWA) solutions, for example, addresses employee financial stress while enhancing retention. Investment in this space reached £1.2 billion in 2023, underlining its critical role in modernising SMB operations.

Embracing Web 3.0 and decentralisation

Web 3.0 technologies, including decentralised finance (DeFi), smart contracts, and blockchain-based cross-border payments, are poised to revolutionise SMB operations. These tools offer the potential to reduce transaction costs, automate workflows, and enable seamless global trade. While regulatory uncertainties remain a hurdle, the long-term benefits of decentralisation—such as enhanced interoperability and data security—make it an essential consideration for fintech innovation.

Opportunities for financial services providers

The SMB digital shift presents a once-in-a-generation opportunity for fintech and financial service providers. By addressing the unique challenges of SMBs, such as fragmented operations, credit access, and risk management, the sector can unlock significant value. Key strategies for engagement include:

• Simplification: Develop user-friendly solutions that streamline SMB operations and reduce complexity.
• Integration: Leverage APIs and open banking frameworks to provide seamless interoperability.
• Personalisation: Tailor services to specific industries or SMB segments, recognising their diverse needs.

Conclusion

As SMBs continue to embrace digital transformation, they are redefining the expectations of financial services. Fintech companies that align with their evolving needs—offering integrated, scalable, and secure solutions—stand to benefit from a dynamic and fast-growing market. The Visa Global SMB Trends Report underscores the urgency for fintech professionals to innovate and adapt, ensuring they remain integral to the future of SMB growth.

For fintech and financial services professionals, the message is clear: the SMB sector is not just a market segment but a cornerstone of future economic innovation.