Beyond the Product: Delivering Real Solutions

Why Banks and Fintechs Have Failed to Solve the $8 Trillion Working Capital Problem

By Ali Ansari

The race for liquidity and working capital has been running for decades. However, the track has changed as we no longer live in the world of predictable trade flows, bilateral facilities, and slow-moving capital. Global supply chains now move in real time, risk moves faster than paperwork, and value is created through data, not documents.

Yet much of the industry is still chasing efficiency for racing the old track; an outdated system, instead of preparing for the new course. The leaders have already switched lanes: they’re building adaptive, data-driven ecosystems that move liquidity dynamically across networks, not hierarchies.

This is the story of modern trade finance and working capital. Banks and fintechs have spent years building increasingly sophisticated financial products: supply chain finance, asset securitization, receivables marketplaces.

Meanwhile, businesses, especially SMEs, continue to gasp for liquidity.

The Great Imbalance

The numbers reveal a stunning paradox. The IFC MSME Finance Gap Report estimates that small and medium-sized enterprises face a $5.7 trillion funding shortfall and as much as $8 trillion when informal firms are included.

At the same time, according to PwC’s Working Capital Study 25/26, companies worldwide are sitting on roughly $2 trillion in excess working capital that could be freed up for investment to drive growth.

Banks aren’t short on capital either. Asset-to-deposit ratios hover around 70%, indicating institutions remain well-capitalized and eager to deploy funds.

Although there is ample liquidity within the global financial system and with large corporates, much of it remains inaccessible to those who need it most. The flow of capital is impeded by outdated processes, fragmented systems, and a lack of understanding of clients’ real needs.

 The liquidity exists. It is just trapped in the wrong places.

Why It Happens

• Misaligned Incentives

Product P&Ls still drive behaviour. Success is measured by “product uptake,” not by actual improvement in client liquidity or ecosystem health. Teams are rewarded for selling, not solving and that distorts priorities.

• The Frenemy Problem

Despite talk of “ecosystems,” collaboration between banks and fintechs remains superficial. The two operate as frenemies; partnering for optics while quietly competing for the same client wallet. Instead of jointly addressing end-to-end working capital challenges, each focuses on winning its own race.

The result: siloed initiatives, fragmented data, and duplicated infrastructure. An ecosystem in name, but not in function.

• Technology Without Transformation

In most banks, technology strategy is vendor-led, not vision-led. At best, it reflects the borrowed vision of consultants rather than the collective vision of teams serving clients. Core systems evolve in response to what technology providers can deliver, not what bankers and businesses actually need.

Many bankers also resist technologies that could reshape client engagement tools that might automate advisory processes or reduce dependence on relationship managers. The fear of disintermediation outweighs the appetite for innovation.

The predictable result: technology digitizes existing workflows rather than reinventing them. The focus is cost reduction. The result is faster paperwork, not smarter engagement, and better outcomes.

• A Focus on Cost Reduction Over Value Creation

In recent years, much of the industry’s energy has been directed towards reducing operational costs and incremental improvement. This approach has led to streamlined processes, resulting primarily in quicker completion of paperwork and administrative tasks.

However, this emphasis on efficiency has not translated into more meaningful client engagement or improved outcomes. Instead of fostering deeper relationships or delivering tailored solutions that genuinely address client needs, efforts have often stopped at making existing processes marginally better.

As a consequence, the opportunity to achieve smarter, value-driven interactions and results remains largely unfulfilled.

An Opportunity to Fix the System

Artificial intelligence offers the financial community the chance to rethink how working capital is understood, designed, and delivered. Instead of patching old systems, the industry can finally redesign the architecture of working capital, making finance adaptive, data-driven, and responsive to real-world business flows.

• Data as the New Liquidity

The first step is visibility. Working capital inefficiency is fundamentally an information asymmetry problem. Every day, terabytes of transaction, procurement, and payment data sit unused across supply chains. Unlocking that data securely and collaboratively is the foundation. When corporates, banks, and fintechs share a single view of an ecosystem’s financial heartbeat, capital naturally flows to where it creates the greatest impact.

Data does more than highlight issues, it can anticipate them. AI models can proactively predict future challenges, model various scenarios and the consequences of counterparties’ behaviour, and recommend liquidity allocation strategies ahead of potential disruptions. 

• Agentic Finance Design

Once data is connected, the next frontier is agentic finance: using AI agents to launch fit-for-purpose solutions dynamically. Imagine autonomous agents simulating hundreds of trade finance configurations e.g. factoring, dynamic discounting and supplier credit; all customized to the real-time cash position of every entity in the network.

Instead of human teams taking months to structure a single deal that cause delay resulting in missed opportunities for both businesses and lenders, agentic systems could build bespoke financing schemes in minutes, adjusting terms as conditions evolve. That is commercial finance, operating at the speed of digital ecosystems.

• Human-in-the-Loop Innovation

 AI shouldn’t replace financial expertise; it should amplify it. Relationship managers, treasury specialists, and risk analysts should become conductors of digital-first processes, guiding machine-led simulations with human judgment and sector understanding. The goal is to scale tailored, context-aware solutions to thousands of businesses simultaneously.

• A New Role for Banks and Fintechs

In this world, banks and fintechs stop being product factories and become liquidity architects. Their competitive advantage will not lie in balance sheets alone, but in their ability to model, match, and mobilize capital with precision. Thus, creating a win/win for both lenders and businesses to improve the flow of liquidity, increase competitiveness and growth. 

AI-Driven Competitive Advantage in Finance

The organisations that will thrive in this evolving financial landscape are those capable of harnessing artificial intelligence to orchestrate a seamless integration of data connectivity, intelligent design, and commercial finance.

By doing so, they create adaptive financing ecosystems that evolve in tandem with the businesses they support. These ecosystems are not static; they adjust dynamically as business needs shift, ensuring that financial solutions remain effective, relevant and delivered at speed.  

Ultimately, the ability to bring together these elements, data connectivity, agentic design, and digital onboarding will distinguish the true leaders in the future of commercial finance.

Liquidity is not the problem. Access is. The market does not need faster runners; it needs a redesigned track. Those who connect data, funding, and ecosystems will not just finish the race; they will redefine it.