SMEs will soon be able to manage their finances from a single, central hub, according to a new report, which predicts the rise of the integrated ‘SME cockpit’.  Bringing together services currently performed by banks, accounting platforms, and cash flow tools, the cockpit will reduce the need for businesses to juggle numerous apps, while providing an accurate real-time view of finances. 

The report, entitled Blurring Lines, which has been prepared by tech providers Hokodo and Practice Ignition, suggests that trends such as app fatigue, connected data, PSD2 and API technology make the emergence of the SME cockpit inevitable. 

Based on interviews with over 25 accounting platforms, neobanks and fintechs, it discusses how different players across accounting technology, banking and fintech are vying to win the race to take on this central role. It also highlights the impact this industry disruption will have on traditional accountants and bookkeepers.  

Highlights of the report include:

  • Accounting platforms are emerging as the central hub for SME financial services: with their open APIs and ecosystem mentality, accounting technology providers are rapidly gaining a holistic view of their clients’ financial behaviours. As such, they are set to become marketplaces for services such as business loans, and in some cases could even provide loans themselves.
  • Neobanks are vying for position: with their homegrown invoicing and accounting solutions, neobanks are also poised to become leaders in integrated SME services. Experienced at partnering with fintechs, leading challenger banks have the funding and agility required to make an impact in the SME space. 
  • Established banks are fighting to keep up: incumbents are also rapidly building their own capability for integrated SME finance, either by developing or acquiring technology to compete. But they have to move fast or find other means of generating new income streams that will ensure their future success. 
  • Greater automation will force accountants to evolve: the rise of technology means traditional accountants and bookkeepers will have to develop to focus more heavily on advisory services, rather than crunching the numbers. This will require upskilling at all levels, to ensure they can support SMEs effectively in the digital age.