Next-Gen Transaction Banking for the Mid-Market and SME Segment: Unlocking Working Capital with AI and Embedded Finance

The Untapped Opportunity in Mid-Market and SME Transaction Banking

Mid-sized corporates and small-to-medium enterprises (SMEs) are the backbone of the global economy, yet they remain underserved by traditional transaction banking. While large corporates have long benefited from bespoke treasury solutions, SMEs and mid-market firms often face fragmented banking relationships, limited access to working capital, and cumbersome onboarding processes. As digital-first challengers and fintechs raise the bar for speed and personalization, banks have a unique opportunity to reimagine how they serve this vital segment—profitably and at scale.

The New Era: AI-Powered, Embedded, and No-Code Solutions

The convergence of artificial intelligence (AI), embedded finance, and no-code ERP integrations is transforming transaction banking. For mid-market and SME clients, this means:

Real-time, 360-degree visibility into cash and liquidity across all banking relationships
AI-powered dashboards that aggregate data, forecast liquidity, and surface actionable insights—without the need for IT or engineering resources
Embedded finance that brings banking directly into the platforms where businesses operate, such as ERP and accounting systems
Rapid, digital onboarding and seamless integration, reducing time-to-cash from weeks to hours

Why Now?

Market dynamics are accelerating the need for change:

Over £1.2 trillion in working capital is tied up globally—much of it within SMEs and mid-market firms
55% of large organizations pay small business suppliers late, straining SME liquidity
SMEs maintain 6–10 bank relationships on average, yet 62% seek a single, real-time view of balances
Fintechs and neobanks are capturing market share by offering faster, more transparent, and more integrated solutions

Addressing the Unique Pain Points of Mid-Market and SME Clients

1. Limited Treasury Resources and Fragmented Banking

SMEs and mid-market firms rarely have dedicated treasury teams. Managing multiple bank portals, reconciling data, and forecasting cash flows is time-consuming and error-prone. AI-powered, no-code dashboards now enable these businesses to:

Instantly connect all bank accounts and ERPs via secure, automated APIs
Visualize total working capital, upcoming cash needs, and top clients or suppliers in one place
Receive proactive, AI-driven alerts for anticipated shortfalls or opportunities

2. Cumbersome Onboarding and KYC

Traditional onboarding can take weeks, with repeated requests for information and manual compliance checks. Next-gen solutions leverage digital workflows, open banking APIs, and AI-driven identity verification to:

Reduce onboarding times from weeks to under an hour
Reuse data across products and services, minimizing friction
Enable same-day access to working capital finance

3. Need for Rapid, Flexible Access to Working Capital

SMEs often face unpredictable cash flow gaps. AI-driven platforms can:

Analyze transaction and behavioral data to pre-approve credit offers
Surface tailored, invitation-only finance options directly within the dashboard
Automate underwriting and disbursement, reducing time-to-cash to less than a day

Embedded Finance: ERP as the New Digital Bank

The future of transaction banking is embedded. By integrating banking services directly into ERP and accounting platforms, banks become invisible enablers of business operations. For SMEs and mid-market firms, this means:

No more toggling between portals or manual reconciliations
Real-time, unified views of cash, payments, and credit
Seamless approval workflows and smart notifications—accessible from any device

For banks, embedded finance unlocks:

New revenue streams through AI-as-a-Service and platform licensing
Scalable distribution via partner ecosystems and ERP integrations
Deeper client engagement and higher cross-sell/upsell rates, driven by data-driven personalization

Overcoming Barriers: Modernizing for Scalable, Digital-First Delivery

Transitioning to this model requires banks to address legacy technology, data silos, and organizational inertia. The path forward includes:

Coreless, cloud-native architectures that decouple data and business logic from legacy systems
No-code, self-service tools that empower both clients and bank teams to build and iterate solutions quickly
Agile, cross-functional teams aligned to client outcomes, not product silos
Robust data governance and responsible AI frameworks to ensure security, transparency, and compliance

Real-World Impact: What’s Possible

Banks embracing next-gen transaction banking for SMEs and mid-market clients are already seeing measurable results:

Onboarding times reduced from weeks to under an hour
50% increase in ensured liquidity and uninterrupted operations for clients
80% improvement in financial health through proactive forecasts
60% increase in cross-sell and upsell of working capital products
New revenue streams from AI-as-a-Service and embedded finance partnerships

Publicis Sapient: Your Partner for Next-Gen Transaction Banking

Publicis Sapient partners with leading banks to design and deliver next-generation transaction banking solutions for the mid-market and SME segment. Our expertise spans:

Strategy and consulting to define the vision, value chain, and business case for AI-powered, embedded finance
Product and experience design to create intuitive, client-centric journeys and no-code tools
Engineering and data to build scalable, secure, and compliant platforms that integrate seamlessly with client systems
AI and analytics to unlock actionable insights, automate decisioning, and drive continuous innovation

We have delivered:

A BaaS-first commercial SME bank, fully functional in 9 months, orchestrating 22 fintechs and enabling real-time, API-driven ERP integration
Strategic joint ventures with leading banks to create platform businesses that combine banking and non-banking services, reaching millions of customers
AI-powered dashboards and embedded finance solutions that reduce onboarding times, increase cross-sell rates, and deliver measurable revenue and cost benefits

The Road Ahead: From Vision to Value

The transformation of transaction banking for mid-market and SME clients is well underway. Banks that act now—modernizing their technology, embracing AI and embedded finance, and reorienting around client needs—will not only defend their market share but unlock new growth and relevance in a rapidly evolving landscape.

Ready to build the future of transaction banking for SMEs and the mid-market?

Publicis Sapient stands ready to partner with you—combining deep industry expertise, proven frameworks, and cutting-edge technology to deliver scalable, AI-powered solutions that drive new revenue streams and lasting client value.

To learn more about how Publicis Sapient can help your bank unlock working capital and lead in the era of AI and embedded finance, visit publicissapient.com/fs.