# SMEs move to the cloud new opportunities for bankers-Magazine Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2017-06-13 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: The Evolution of Fintech: Partnerships with Banks Meta Description: Learn how technology is driving partnerships between fintech companies and banks to revolutionise financial management solutions for small businesses. URL: https://financedigest.com/smes-move-to-the-cloud-new-opportunities-for-bankers-magazinehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/hand-point-to-blank-network-1736843756205-compressed.jpg) _Attributed to **Alex Campbell**, Managing Director of Xero Asia_ ![Alex Campbell, Managing Director of Xero Asia](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/alex-campbell-managing-dir-225x300-1736843756033-compressed.jpg) Alex Campbell, Managing Director of Xero Asia The financial sector is no stranger to disruption driven by technology. The [industry is once again at an inflection point with structural change](https://www.financedigest.com/popcorn-containers-market-important-changes-in-industry-dynamics-during-2017-2027.html "Popcorn Containers Market  Important Changes in Industry Dynamics during 2017-2027") driven by a confluence of technology, regulation and changing consumer behaviour. The first wave of what we now call “fintech” looked to be aiming to compete with the [banking sector](https://www.financedigest.com/bank-of-england-launches-first-sector-wide-liquidity-stress-test.html "Bank of England launches first sector-wide liquidity ‘stress test’"). But, these early fintech companies soon found that gaining distribution at scale and financial strength that the [banks](https://www.financedigest.com/finance-brokers-bank-on-red-flag-alert-to-help-beat-fraud.html "FINANCE BROKERS BANK ON RED FLAG ALERT TO HELP BEAT FRAUD") have is extremely hard and expensive (with the exception of a few areas like payments). As a result [fintech is now in its second wave where partnerships with banks are forming to create value](https://www.financedigest.com/fintech-incubation-more-value-than-meets-the-eye.html "FINTECH INCUBATION: MORE VALUE THAN MEETS THE EYE") for customers. The fintech companies bring their ability to innovate and build great experiences for customers and the banks bring a huge customer base, brand and [balance sheet](https://www.financedigest.com/ecb-policymakers-back-jumbo-rate-hike-differ-on-balance-sheet-cut.html "ECB policymakers back jumbo rate hike, differ on balance sheet cut"). In a similar vein, online banking and cloud accounting have been on parallel paths. In the [near future](https://www.financedigest.com/hyperkalaemia-treatment-market-sale-will-apprehended-to-see-impressive-growth-in-near-future.html "Hyperkalaemia Treatment Market Sale Will Apprehended To See Impressive Growth In Near Future"), the two will become inseparable. Tech companies – in particular Xero – and banks are working closer together, more than ever before to provide customers with financial management solutions that they have [come to expect from the digital age](https://www.financedigest.com/constructive-digitization-to-let-the-tissue-diagnostic-market-come-of-age.html "Constructive digitization to let the Tissue Diagnostic Market come of age"). A big part of this is the evolution of the financial web, which uses high integrity accounting data to help [small businesses](https://www.financedigest.com/reasons-to-obtain-iso-9001-certification-for-small-businesses-in-australia.html "Reasons To Obtain ISO 9001 Certification For Small Businesses In Australia") access the capital they need to grow. The financial [web facilitates a circle of transactions – beginning with secure](https://www.financedigest.com/secure-web-gateway-market-expectations-growth-trends-highlighted-until-2029.html "Secure Web Gateway Market Expectations & Growth Trends Highlighted Until 2029") bank feeds where transaction data flows automatically into the small business accounting platform every day. Fully formed, the financial web connects small businesses with financial institutions, government, apps all in one platform so an entrepreneur has a complete view and control over their financial and business data – ideally with an accounting professional to help them along the [way](https://www.financedigest.com/6-ways-to-finance-your-dream-vacation.html "6 Ways to Finance Your Dream Vacation"). These direct, [digital bank feeds have transformed](https://www.financedigest.com/digital-transformation-in-banking.html "Digital transformation in banking") the way small businesses work. Overnight their bank transactions are automatically loaded into their accounting platform in the cloud, and when they need to work they can pick up their phone and, with the tap of a button, mark an invoice or bill as paid – creating accounting entries. From the accounting software, these entries are then passed securely onto the user’s online banking system – only the people with the appropriate permissions can check the entries off. When [payments are passed securely to the bank and processed through the bank’s payments system](https://www.financedigest.com/covid-19-putting-a-spotlight-on-mea-payment-systems.html "COVID-19: Putting a spotlight on MEA payment systems"), this unique two-way transaction connectivity forms the basis for high integrity accounting. The data hasn’t been touched by human hands, and a [small business](https://www.financedigest.com/top-benefits-of-invoice-discounting-for-small-businesses.html "Top Benefits of Invoice Discounting for Small Businesses") owner’s accountant can see, using the data assurance dashboards in cloud accounting software, there have been no manual transactions added or deleted. Accountants can then be very [confident in the cash position](https://www.financedigest.com/go-for-it-think-positive-believe-in-yourself-and-do-what-you-love-says-dawn-elliott-of-sew-confident-chorley.html "“Go for it, think positive, believe in yourself and do what you love” says Dawn Elliott of Sew Confident Chorley") of the business and, here, there’s an opportunity for continuous certification of the quality of the books. This presents an amazing [opportunity for accountants to be a major sales](https://www.financedigest.com/veterinary-suture-kit-market-will-generate-new-sales-opportunities-in-upcoming-year-says-fact-mr.html "Veterinary Suture Kit Market Will Generate New Sales Opportunities In Upcoming Year, Says Fact.MR") channel for banks. In the majority of situations, a small business owner on Xero is connected to an accountant. Across all these accountants and small business owners, there are hundreds of thousands of conversations about financial [services happening](https://www.financedigest.com/shift-happens-but-what-are-cfos-in-financial-services-going-to-do-about-it.html "Shift happens. But what are CFOs in financial services going to do about it?") every month. Banks need to educate accountants on their services, and accountants are open to this training. Accountants want to know how they can take [banking services and add value to small businesses](https://www.financedigest.com/two-speed-economy-in-sweden-central-bank-business-survey-shows.html "Two-speed economy in Sweden, central bank business survey shows"). Cloud accounting software connects a [global network and creates opportunities](https://www.financedigest.com/global-cryogenic-submerged-motor-pumps-market-to-create-an-absolute-opportunity-of-us-714-4-million-by-2030.html "Global Cryogenic Submerged Motor Pumps Market to Create an Absolute $ Opportunity of US$ 714.4 Million by 2030") for small businesses. The financial web makes it easier for financial institutions to identify, reach and serve small [businesses globally](https://www.financedigest.com/bonn-to-boardrooms-the-implications-of-climate-diplomacy-on-global-business.html "Bonn to boardrooms: The implications of climate diplomacy on global business") through one platform, at scale – making it easier for small business owners to access capital. It also helps them make better decisions so they can grow, [boosting employment and economic](https://www.financedigest.com/king-charles-coronation-will-be-an-economic-boost-buckingham-palace-says.html "King Charles’ coronation will be an economic boost, Buckingham Palace says") contributions in the process. While the use of accounting data to make lending decisions is well established, leveraging new bank APIs to integrate [banking into business software, eliminating manual application processes provides a massive opportunity for banking roadmaps over the next](https://www.financedigest.com/explainer-why-is-bank-of-england-acting-again-what-next-in-the-uk-crisis-2.html "Explainer-Why is Bank of England acting again? What next in the UK crisis?") 10 years. All this combines to help connect the financial world to small business owners, supporting entrepreneurs, around the corner and the globe. ``` “Original publication in Finance Digest Issue 1 https://www.financedigest.com/finance-digest-print-magazine/” ``` --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---