UK SMEs plan post-COVID international expansion

0
35

Global fintech platform Airwallex today announced the results of a survey conducted on UK SMEs, revealing that more than three-quarters of them have geographic expansion plans for the next year, with more than two-thirds convinced that digital adoption will be important to enable accelerated growth opportunities.

The survey of business decision makers considered the reality facing UK SMEs as they seek to invest and grow their operations in 2022.

UK SMEs continue with international expansion

Widespread global expansion of UK SMEs is expected in 2022, with 77% of respondents saying they want to expand their presence in Europe and / or other international markets. 62% (six out of ten) of UK SMEs plan to expand to Europe next year and 38% have plans to expand beyond Europe.

The expansion plans are driven by the need to expand their business networks:

More than half of the UK’s SME expansion strategies for 2022 involve acquiring new customers
Over two fifths aim to find new suppliers abroad
To support their growth, nearly two-fifths also plan to expand their marketing activities, with the same figure choosing to establish new business partnerships in international markets.

Hidden fees are a sore point for UK SMEs

Despite the focus on international expansion, the survey also suggested that business decision makers within UK SMEs are largely resigned to carrying out hefty payment fees and foreign currency.

The challenges surrounding cross-border payments continue to have brought considerable frustration, particularly at a time when COVID has forced many to make and manage cross-border payments.

More than half of UK SME business decision makers view international FX fees on cross-border payments as a pain point that requires too much effort to get around, while 26% think they are a pain point that cannot be avoided
More than two-thirds agree that the “hidden taxes” that come from dealing internationally with merchants are just a “necessary evil” for doing business across borders.
Handling payments in local currency is also a problem – over half agree that paying international suppliers in local currency is a headache

UK SMEs keen to invest in business growth

In addition to expansion plans, the survey also assessed the impact payment fees could have on SME growth in the UK. Over two-thirds of respondents agree that companies that fail to take steps to reduce unnecessary fees / charges for international trade are hindering their growth.

In fact, the survey revealed that losses from card fees in particular could be better used to enable business growth:
Three quarters of UK SMEs would invest the freed up budget back into their business
One fifth would invest the savings in personnel
17% would opt to invest in marketing, with the same figure opting to expand the range of products
About one in ten would invest in facilities, for example, office expansion

UK SMEs show a greater appetite for digital adoption

Two-thirds of UK SME business decision makers believe organizations that don’t adapt their banking strategy to the digital age will struggle against competitors. For many, the visibility and transparency that a digital platform offers is critical: 64% of respondents think that companies without a real-time view of expenses, transfers and all other transactions to monitor do not have firm control over own finances.

While 7% of respondents have already moved all or most of their finances from traditional banks to manage them on a digital fintech platform, a further 68% would consider doing so in the future. In fact, more than two-fifths (44%) are considering doing so within the next 12 months.

Jed Rose, GM, EMEA of Airwallex comments, “As companies around the world have been affected by the pandemic, more innovative and technology-driven strategies are giving them the opportunity to enhance their globalization efforts. Be it the chance. to open accounts in new markets in seconds or to combine all international payments in a single platform for greater control and flexibility, the identification of technology platforms capable of enabling end-to-end solutions that support the expansion of the business across borders can facilitate sustainable future growth for companies of all sizes ”.

LEAVE A REPLY

Please enter your comment!
Please enter your name here