Small and medium-sized enterprises represent the backbone of economies. SMEs represent 90% of all businesses and are responsible for approximately 70% of jobs and GDP worldwide.

However, access to financial services for SMEs is a problem, especially in emerging economies. Many SME owners are often forced to choose to prioritize their immediate survival rather than the ability to invest in business services and capabilities that can deliver results over the long term. Searching for loans through traditional banks is challenging, as they often impose strict criteria, slower and longer approval processes, poor user experience, have little or weak knowledge of each business and its needs, and lack of a data-driven process that leaves many SMEs without financing. What you need to grow.

As traditional banks continue to tighten their finances, SMEs are increasingly gravitating towards non-traditional and digitally focused sources of financing. In particular, a large number of SMEs are starting to look at fintech, especially banks, lenders and digital-only platforms, as the best alternatives to meet their working capital needs. Now, digital platforms provide SMEs with customized solutions, facilitating their growth in new markets. In response to this emerging trend, digital banks are enhancing their offerings to SMEs.

In addition to offering affordable loans to SMEs, new digital lenders now take a customer-centric approach, developing proposals tailored to their needs rather than simply disbursing the required financing amounts. This is reflected in various key points of the financing process.

The loan application is simple and friendly, with quick resolutions and payments, flexible terms and conditions, and offers competitive rates. Managing these loans has also become easier for SMEs, through integrated banking services, accounting and financial reporting solutions.

As we head into the future, this symbiotic relationship between SMEs and digital banking is irrefutable. This alliance has allowed SMEs to overcome traditional financing hurdles, foster innovation and pivot efficiently during economic uncertainties.

The emergence of digital lenders and the progressive stance of financial technologies means a paradigm shift in SME financing. Not only has it filled the financial gap left by traditional banks, but it has also demonstrated the ability to adapt and customer orientation, thus fostering an environment conducive to the growth of this type of company and innovation. The customized solutions and diverse strategies adopted by various fintech companies and digital platforms epitomize the resilience and creativity of the sector, promising a strong support system for SMEs.

In conclusion, the evolution of digital banking is undoubtedly a lifeline for SMEs navigating the complex landscape of finance and growth. Evolving trends, innovative solutions and changing dominance in lending highlight the transformative impact of digital banking in empowering SMEs. As digital platforms continue to offer personalized, accessible and innovative solutions, their essential role in the survival, expansion and innovation of SMEs is strengthened.

Looking to the future, the continued evolution of this sector requires stakeholders (SMEs, banks and policy makers) to remain vigilant, adaptable and collaborative, ensuring that the symbiosis between digital banking and SMEs continues to thrive in the face of future uncertainties and opportunities.

We hope that this trend will be embodied in Mexico in the future.

PricewaterhouseCoopers Financial Services Advisory, Mexico