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Accounting, banking and fintech platforms in race to become SME Cockpit, finds new report, Blurring Lines

Accounting, banking and fintech platforms in race to become SME Cockpit, finds new report, Blurring Lines

Accounting, banking and technology set to converge, as providers aim to combat ‘app fatigue’ and give SMEs unprecedented visibility of their finances


Accounting, banking and fintech platforms in race to become SME Cockpit, finds new report, Blurring Lines

28 June 2019: 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 their finances.

Blurring Lines, a report from Hokodo, the API-based insurance platform and Practice Ignition, the smart contracts and payments provider, analyses how trends such as app fatigue, connected data, PSD2 and API technology makes 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 real-life 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.  

“The SME finance space is undergoing enormous disruption, as a multitude of apps and cloud services cater to businesses’ every accounting and finance need” commented Louis Carbonnier, Co-Founder and Co-CEO at Hokodo.  

“While SMEs are currently drawing on an ecosystem of providers, ranging from online banks, to bookkeeping software and cash flow management apps, there are signs that app fatigue is starting to set in, as businesses struggle to manage numerous different providers. This, combined with the rapid evolution of technology, means it is only a matter of time before the best services converge, making the SME Cockpit a reality.”

Trent Mclaren, Global Head of Accounting & Strategic Partnerships, Practice Ignition, commented: “SMEs have long relied on specialist accountants and bookkeepers to keep their finances in check. However, the rise of new technology means that an increasing amount of this ‘heavy-lifting’ can now be automated, giving SMEs an unprecedented real-time view of their finances and cash flow , along with cleaner, more accurate data. This enables better decision-making, improved success and enables accountants to advise their clients more effectively.

“This is great news for SMEs and technology providers, but raises concerns for traditional accountants, as machines take on much of their workload. They will need to start thinking seriously about how they will continue to add value to their SME clients, with a greater focus on advisory and by working alongside the technology available to offer a fully integrated offering.”

To download the full report, visit Hokodo here