Demand for trade and working capital credit by SMEs continues to significantly outstrip supply from banks. Trade Ledger’s Martin McCann believes open finance can fix that gap, but agentic AI will fix it fasterIn an interview with The Fintech Magazine in 2022, British entrepreneur Martin McCann urged banks to ‘think about what the next three years will look like’ as a juggernaut of open finance technology promised to demolish their model of SME lending.It’s a model that was widely regarded at the time (including by the International Chamber of Commerce, the Organisation for Economic Co-operation and Development, and the Export-Import Bank of the United States) as being deeply dysfunctional, and still is. But those financial institutions that didn’t take McCann’s advice might now be regretting it.Speaking today, the Co-founder and CEO of commercial lending-as-a-service platform Trade Ledger, says: “We’re starting to see aspects of profitable credit being stripped away from banks and go to non-bank lenders. In the US, the fastest-growing source of credit for private companies is private funds.“These funds can choose which sectors of the market that they want to steal from banks – and it’s usually the more profitable ones.”Private lenders might play by their own rules, but in 2023, they funded 86 per cent of leveraged loans in the US, up from 61 per cent in 2019, according to PitchBook LCD. And while they were eating the commercial banks’ lunch at one end of the table, neobanks worldwide were moving from a starter course of solopreneurs to addressing the needs of SMEs at the other.The shift of credit away from bank lenders is part of a wider dissatisfaction with SME legacy banking services. A 2024 survey from the IBM Institute for Business Value among 1,000 SME owners and managers across different world economies, revealed a deep schism in what bosses looked for in a bank and what bankers thought they wanted across a range of areas

SMEs need banks to take centre stage in the high-volume, bilateral loan market – but that’s challenging on so many levels. Finastra’s Robert Downs explains how Finastra’s Loan IQ Simplified Servicing solution can helpWhen Robert Downs’ daughter reached the age of wanting to know what Daddy did for a living, he explained he worked for a bank that lent money to people.“And what do they do?” she asked.He pointed to an advertisement on the street for one of the bank’s clients. “Then I saw the signpost had a manufacturer’s name around it. ‘Actually, we’ve also lent money to the company that made the signpost!’, I said.”Downs was a director at Credit Suisse at the time. Today, as Vice President and Global Head of Corporate and Syndicated Lending for financial services software provider Finastra, he oversees the syndicated and SME business lending operation, supporting hundreds of institutions worldwide with solutions that span the entire loan processing journey.What the conversation with his daughter illustrated, he says, is that there would be no economic progress if it wasn’t for lending.“Lending is one of the oldest businesses on the planet – starting from ‘can I borrow your spear to go hunting in return for some stones?’. Hospitals, big industry, tunnels, oil rigs, ships, everything is driven by corporations’ huge appetite for debt.”Progress for millions of SMEs, though, is often painfully slow as major banks struggle to make lending to these individually small engines of the economy pay

A new global leader has emerged in consulting and testing for payments, smart mobility and ID solutions. Fime’s Lionel Grosclaude and Raphael Guilley of Consult Hyperion, now part of the Fime group, look to the futureBy next year, all EU citizens will have access to a digital ID wallet, unlocking everything from tax records to alcohol sales. In the UK, Londoners have been hopping on and off the Tube simply by tapping their phones for years, while a palm print could soon give you a ticket to ride in Beijing. And everywhere payment providers are striving to securely tie payment details to the individual authorised to approve them.The technologies that support all these areas of our lives will likely converge in a digital future where identity is the most valuable currency. And it’s a future that Fime has been preparing for.Los Angeles-based VC Gallant Capital acquired Paris-based payments testing businesses Fime and the payments testing division of US firm UL Solutions, in a separate deal, in early 2024, going on to combine them under the Fime brand. Just a few months later, Fime completed the takeover of London-based Consult Hyperion, a leading global independent consultancy in digital identity, payments, and smart mobility.The result is a group that now employs more than 900 specialists across all three areas of expertise, with 13 global testing labs, representing a huge resource of knowledge and talent