100% online and open banking: How fintech is serving micro and small businesses

Around 500m micro and small businesses are operating around the world, each playing a vital role in supporting their country’s economy — from leveraging AI and open banking to providing software as services to other enterprises

But to run, these businesses require the support of credit and financial services that understand their unique challenges — while traditional financial institutions increasingly require the startups’ agility and disruptive approach.

Overcoming barriers

One of the biggest barriers to micro and small businesses obtaining the lending facilities they need is the creditworthiness assessment. Traditional banks use rigid criteria based on balance sheets, established financial records and asset guarantees — elements that many micro businesses do not fully possess.

“Bureaucracy can be a significant hurdle: obtaining a loan can become a long and complex process, with lots of documentation requests,” explains Marzio Pividori, CEO and general manager of Milan-based fintech bank Banca AideXa. “Timings are often incompatible with the needs of a business that requires immediate liquidity to cover investments or operational expenses.”

As a result, Pividori says micro and small businesses are “facing a significant drop in bank credit”. But not all is lost because fintech can pick up the slack.  

“The desertification of bank branches — including 30% fewer branches in Italy over the last ten years — and the introduction of regulations like PSD2 are changing the sector, opening new opportunities for those, like us, who can offer a more flexible evaluation model based on the real data of the business,” says Pividori. Banca AideXa has given out €1bn in loans to Italian businesses.

PSD2 is the Second Payment Services Directive, an EU act that strives to modernise and secure online payments in the EU. It focuses on increased competition, enhanced customer protection and the rise of payment services like open banking.

AI and open banking

While AI has been a constant presence in news cycles in recent years, many micro or small business owners may not be aware of how AI and open banking can support their own operation.

One way is through advanced data analysis, with AI models which can analyse millions of data points in seconds. This enables more precise and quick credit assessments that can so often be  so crucial to a small business getting the funding they need. Another way is through open banking’s ability to create personalised offers based on the business’s financial behaviour, providing access to data that banks previously did not have.

Banca AideXa, for example, has developed an entirely digital process that allows businesses to request financing in a few minutes without having to provide paper documentation or visit a branch.

“Thanks to open banking, we can access a business’s bank data with the customer’s consent, analysing cash flows, revenues and expenses in a few moments,” says Walter Rizzi, deputy general manager and chief product and customer officer at Banca AideXa. “This allows us to assess creditworthiness more fairly and promptly, without the need for additional documents. The customer, in turn, receives a real-time evaluation and a financeability check even before notifying the credit information systems.”

While technology plays an integral role in the output of fintechs, Pividori says the most successful businesses still place value on the human touch when it comes to customer interactions.

“We often talk to customers via videoconference because, in some cases, looking each other in the eye is important,” he says. 

The agility of fintechs

Fintechs are also much more agile, which can be better suited to micro and small businesses. 

Digital processes, for example, allow for a response in a few minutes and credit can be disbursed quickly. Banca AideXa releases financing in around 20 days — the difference is stark when compared to traditional banks, for whom it can take up to two months.

“Our goal is to offer not only financing, but also digital tools that help businesses grow,” adds Rizzi. “Speed and flexibility are essential in order to be a reference point for Italian micro and small businesses.

Online accessibility is also key for any business owner, and fintech platforms are available 24/7. This allows entrepreneurs to request financing at any time without needing to visit a branch.

Another key element that enables fintechs like Banca AideXa to serve micro and small businesses efficiently is the ability to optimise operational costs through technology. 

“Reducing the cost to serve is fundamental in addressing this target market,” says Pividori. “In 2024, we managed 30k credit requests with just six credit analysts, leveraging AI and automation. In fact, we have more data scientists and engineers than credit analysts, allowing us to scale efficiently while maintaining high-quality service.”

Of course, regulation remains a challenge for fintechs and banks alike. For instance the Digital Operational Resilience Act (DORA), an EU regulation that requires financial entities to improve their digital operational resilience, came into force in January 2025. 

“The introduction of the DORA represents a challenge and an opportunity,” says Elena Adorno, cofounder and chief operating officer at Banca AideXa. “Adapting to these regulations not only ensures operational resilience, but also strengthens customer trust in digital services.”