Technology continues to redefine SMEs and their capabilities. As the great equaliser, it has made it much easier for small businesses to compete with bigger companies and global corporations.

One area that has seen huge growth since the financial crash in 2008 is the explosion of fintech solutions. As one of the most fintech friendly nations in the world and with one of the highest fintech adoption rates, the UK is at the front of the fintech revolution, empowering smaller companies with limited budgets to use software to scale their business.

From cloud computing and AI to financial modelling and robotics, small businesses are now able to rival the bigger players through more effective business processes. For example, Stripe has made it easier for companies to process payments and utilise an extensive range of point-of-sale tools, opening new marketplaces and increasing profitability, and accounting software like Xero, Sage, or QuickBooks patches straight into a company bank account for bookkeeping, making business accounting easier to manage.

James Robson, CEO, FundOnion, explains that whilst fintech is a great enabler for business growth, it has taken us a long time to get to this point. Funding and cash flow have always been the biggest challenges for any small business and, in the past, funding options were more limited and the application process more cumbersome and labour intensive.

Huge advancements in cloud technology, automation, open banking, and AI, including digital algorithmic credit checks and financial eligibility checks, alongside the rise of challenger banks and alternative lenders, have made it quicker and easier than ever before for small businesses to obtain the finance they need to grow.

2022 was a record year for lending by challenger and specialist banks with 55% market share and £35.5bn in business lending, exceeding traditional banks.

By leveraging data and analytics lenders can build very accurate risk profiles and comprehensive assessments of businesses within minutes instead of weeks. Using AI and automation, lenders can also get a better understanding of the future needs of businesses – when they are likely to require finance, how much, and what the macroeconomic risks might be to that firm, for example.

The ease and speed of securing business finance now means business leaders have more time to spend on developing new service lines, expanding their teams, and working with customers. And this will only get better as more traditional lenders and challenger companies partner to bring technological advances to the masses.

Business leaders can help themselves in the funding process by using AI and automation to gain a comprehensive view of the health of their business and streamline operations to boost creditworthiness. Being in the best position for the application process will also help leaders to obtain finance at the best rates and terms.

The introduction and implementation of new technology has changed business culture. Lenders of all shapes and sizes now must provide services that are automated, data-driven, personalised, transparent, and flexible for business customers. Gone are the days of one size fits all products and customer services.

We all have a role to play in democratising technology and finance. By working together, traditional lenders, challenger banks, regulators, government, and organisations can support and leverage fintech innovations to help a diverse range of businesses to succeed and grow in the UK. Where the likes of AI and automation are used, we must make sure that ethical use is at the heart of its implementation.