For the more than 70 million Micro, Small, and Medium Enterprises (MSMEs) that form the backbone of Southeast Asia’s economy, expanding internationally has become a necessity for long-term growth. Yet, MSME access to banking services is fragmented, leaving them to stitch together FX, payments, and compliance on their own.
The challenge is not a lack of ambition, but a critical resource constraint.
Most MSMEs are lean and lack the in-house expertise and time to navigate a labyrinth of banking systems, payment methods, and regulatory environments across multiple markets. The first wave of digital banking, while improving customer experiences, did little to solve this core issue. Small and medium businesses are still required to step out of their operations to visit a physical branch or wait days for credit decisions.
For a small business balancing growth with daily operations, the time spent resolving financial hurdles makes regional expansion a challenge. This is where a new generation of digital banks can come in as strategic partners, weaving in financial solutions into the platforms that businesses use every day.
Navigating the cross-border trade maze
Today’s MSMEs are bolder and more ambitious, looking beyond domestic markets and pursuing cross-border growth as a deliberate strategy. At ANEXT Bank, we saw a 190% year-on-year increase in cross-border transactions, reflecting how quickly MSMEs are moving online and abroad.
Yet for smaller MSMEs, expansion is constrained. In our always-on digital economy, business happens round-the-clock, making instant access to capital a baseline necessity. However, without proof of long credit histories or formal financial records, MSMEs traditionally find it hard to get their risk assessed and offered credit.
A fragmented global landscape further complicates matters with FX volatility, settlement uncertainty, and compliance risk, hindering MSMEs from capitalising real-time opportunities.
For an MSME, missing one opportunity could have long-lasting impacts on their business. It is imperative that MSMEs gain access to reliable, secure, and transparent rails that allow them to operate with confidence across borders.
Embedded finance: An API-driven shift
With embedded finance, banking is transforming into an intrinsic and seamless enabler at the heart of every business interaction. Through an open API and data-driven ecosystem, MSMEs can access financial services without leaving their platforms, making cross-border activities seamless and significantly more efficient.
However, for platforms that wish to expand their offerings to MSMEs, partnering with a licensed digital bank through an open API framework removes ambiguity around risk management, enabling a faster go-to-market. ANEXT Bank provides the secure, MAS-regulated API infrastructure that is locally compliant, empowering platforms to launch financial services with confidence.
The demand for this model is accelerating as internationalisation becomes a core strategy for MSME resilience. This is where an API-driven model seamlessly provides critical tools, such as near-instant digital credit approval, multi-currency accounts to manage global transactions, preferential FX rates to protect margins, and low-cost same-day cross-border transfers.
Conclusion
Ultimately, this is a strategic shift beyond simple technical integration, one that places robust financial infrastructure at the forefront, allowing banking capabilities to be seamlessly integrated into user workflows for an intuitive, less visible experience.
This shift creates a mutually reinforcing cycle for MSMEs, the financial service platforms they rely on, and the banking partners. With better tools to manage cashflow, MSMEs gain the competitive advantage once reserved for large corporations, transforming how they scale, compete, and thrive internationally. Platforms expand their value proposition, and banks expand their distribution to new markets. This creates a stable network that benefits all parties.
The founders who work strategically, prioritizing strong compliance, scalability, and customer understanding, will set the pace for the future.
Kai Qiu is the Chief Executive Officer of ANEXT Bank.
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Featured image: Sean Pollock on Unsplash
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