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Small Businesses Are Leveraging Technology Solutions To Overcome the Biggest Barriers to Business

It’s anything but business as usual small businesses operating in the complex markets of today. They face a rising number of difficult challenges, including rapidly changing market conditions, rising costs and ever-changing regulatory standards. Businesses must be agile and quick to respond as such hurdles continue to mount pressure on businesses’ bottom line.

To maintain agility to stay in business, many are increasingly turning to the power of technology.

Open banking has emerged as a powerful solution capable of fuelling fintech innovation for business owners, whilst reimagining the way business owners can utilise their own financial data to help make more informed decisions, prove their financial credibility and run their businesses more effectively.

Growing costs, uncertainties and market fluctuations have small business owners looking for access to capital and partners that can help them drive growth.

The challenges small businesses face and the opportunity presented by open banking was a central theme throughout a new report released by Mastercard. As fintech use among small businesses grows, open banking is leveraging the power of data to address key pain points and tackle critical needs such as faster ways to send and receive payments.

The report analyses the following threats to businesses, and how said businesses are working to overcome them:

  • Rising costs heightening uncertainty and challenges

Keeping up with rising costs is the foremost concern of small business owners as they adapt to new realities, and over eight in 10 of the small business owners surveyed said they’re looking for faster and easier access to capital.

Business credit cards are the most popular way that small business owners are choosing to fund their businesses, followed closely by small business loans. In fact, according to the research, 81 per cent said they are looking for loans that are tailored to their business’s specific needs.

  • An open door for technology to help small business operations

Despite mounting challenges, small business owners also see the opportunity to grow and are looking for key partners to help them.

As they increasingly embrace technology solutions to help them manage their core operations, this adoption is opening the door for a new wave of innovation that will power their financial experiences, and ultimately their growth.

Ninety-five per cent of small business owners consider themselves heavy fintech users, creating a wealth of data that can be leveraged for financial solutions unique to their needs.

Open banking adoption is high among small business owners too, with 96 per cent currently linking financial accounts to third-party apps for critical financial tasks, including banking, billing/invoicing, paying bills, accounting and receiving payments.

Even more importantly, small business owners are also recognising the opportunity of open banking and how data can be used to better manage and grow their businesses. The research found that 88 per cent are using data to better manage their business finances, and 85 per cent want to see customised financial recommendations for their business by using their data.

Small business owners recognise the unique opportunity presented by the use of data, and according to the report, the number one reason they’re leaning into open banking is to improve their decision-making process, followed by saving time and effort. Additionally, 85 oper cent need a consolidated place to monitor the financial health of their business.

Business owners continue to look beyond operations as they embrace open banking, with nearly nine in 10 accepting digital payments from customers, and nearly the same number are using open banking-backed methods to accept payments. They cite the speed of digital payments, available cash flow, and secure, personalised transactions as the big benefits of using these payment methods.

  • Increasing cybersecurity and rising threats

Now more than ever, having a digital presence is critical for small businesses, however that also means an increased need for cyber protection. Mastercard’s report explores the digital vulnerabilities that come with small business growth and the need for partners that can help them better tackle these threats.

The top areas where small business owners are open to exploring new options include cybersecurity, data analytics, and inventory management.

Three in four have digital solutions currently, but these measures are largely limited to basic solutions like antivirus software and firewalls. The research found that 66 per cent have experienced at least one digital security threat, and current efforts to combat threats are largely reactionary to these instances.

Still, many are considering security more broadly, with 57 per cent saying purchasing digital security solutions is a personal priority as a business owner whilst half said that it’s essential to their business. But as security adoption grows, optimisation is key, as 85 per cent would prefer to purchase digital security solutions in a bundle or package.

Financial technology is changing the way small businesses pay and get paid digitally, and ushering in a new era of choice, simplicity and personalisation.

By embracing open banking and digital cybersecurity solutions, financial institutions and fintech innovators can provide new and improved solutions tailored to small business owners that turn their challenges into opportunities for growth.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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