Within the DFA Small and Medium Business Surveys, we capture significant information about how these businesses use digital, and their attitudes towards the fast-emerging and potentially disruptive “fintech” sector. Since our last full survey released in mid 2014, and still available on request, much has changed. Today we discuss some of the interesting findings on fintech, in the context of SME’s.
First, looking at how business owners are using digital, (which includes use of smart devices, social media and cloud services) and their preferred channels; the revolution is well underway. We separate business owners into digital luddites (really have not engaged with digital at all), digital migrants (moving to embrace digital, and up the learning curve) and natives (always been digitally at home).
More than half of SME business owners are now migrants, and over 30% natives. This leaves a runt of 12% who are not digitally aware. So, most organisations are well on the way towards digital transformation.
In terms of channel preferences (that’s how they would LIKE to interact, not necessarily how they currently do) the shift to apps and online is stunning. This is not surprising though given the penetration of smart devices, and the fact that many business owners are time-poor. We foreshadowed this in the 2014 report.
We next ask about their awareness of fintech. Of those who were aware, (a small but growing band), we then ask about their attitude towards fintech, and especially whether they might consider accessing funding or other services from new, non-traditional players. The results are again quite sensational, with many digital natives now past awareness, and considering applying or already have applied. Migrants have more mixed attitudes, but many are now beyond awareness. Luddites are not engaged at all.
So the results highlight the digital transformation underway, and underscores the potential for fintechs to disrupt the market – there are ready customers out there, and as awareness grows, many will seek to embrace. It also begs the question as to how incumbents will respond.
Our next full and updated SME report will be published later so stay tuned.
