The ‘financial web’ – what it is and why small business should embrace it

The last few years have been nothing short of revolutionary for the finance industry. Digitally focused finance company start-ups are popping up left, right and centre, attracting millions in investment and posing a real threat to traditional services.

They have swooped in and filled the gaps that the banking sector has not been able to – from startups like challenger bank Tide to peer-to-peer money transfer service TransferWise, and MarketInvoice which allows businesses to sell unpaid invoices to provide working capital.

The Fintech Revolution is happening right now and the banking sector is sitting up and listening. London is still leading this innovation – in fact recent research has revealed that London’s Fintech sector is growing more than three times faster than that of Berlin, despite the decision to leave the European Union.

>See also: Blurred lines: traditional finance vs. fintech

And amid this fintech explosion, small businesses are the biggest opportunity on the web right now. There are over 5.4 million small businesses in the UK alone, making up over 99% of businesses and employing 60% of all private sector employment in the UK according to the FSB.

They are often as nimble as the fintech startups aiming to serve them, demanding different things from the services they use and forcing change, which has given way to the emergence of something we are referring to as the ‘financial web’.

Simply put, the financial web is an ecosystem that has been created by ‘financial platform’ products such as cloud accounting software company Xero, which enable add-on products to connect to it through an open application programme interface (API).

>See also: FinTech innovation under threat from skills shortage

In turn, those add-on product companies may also connect to each other creating a web of interconnected platforms. Within the Financial Web, direct bank feeds are incorporated from traditional banks, payments are automated and it’s made easier for banks and business finance providers to lend.

But why is this so revolutionary for small business? Well, it is fundamentally changing the way that financial service providers interact with small businesses. The aim is to give small businesses a choice of financial services and products that help them to run and grow their business.

Ultimately, they should have easy access to capital, so the financial web removes the day-to-day problems that take small businesses away from what they’re passionate about – running their business.

>See also: How to make big data work for SMEs

The sector is being driven by new technology, cost reductions and changing consumer behaviour, and small business customers now have a choice of which financial services institutions they have a banking relationship with. The financial web is the peer-to-peer, collaborative and route – which brings with it cost and time savings for business owners and lightning quick developments in tech.

The CEO of Tide George Bevis, CEO of MarketInvoice Anil Stocker and Xero’s co-founder Gary Turner will be discussing the importance of the financial web for small business, the future of small business finance and where it will take the sector, on Wednesday 14th June as part of London Tech Week


Sourced by Gary Turner, UK co-founder and managing director of Xero


The UK’s largest conference for tech leadershipTech Leaders Summit, returns on 14 September with 40+ top execs signed up to speak about the challenges and opportunities surrounding the most disruptive innovations facing the enterprise today. Secure your place at this prestigious summit by registering here

Avatar photo

Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...

Related Topics