SME’s are the backbone of any economy. They provide jobs to a much broader cross section of society and strengthen the economic foundation of nations. The EU has numerous regulations in place to help SME’s grow and prosper and uplift the local communities that they operate in as well. However, no matter how friendly the regulations may be, the biggest challenge for SME’s remains their small size. They just don’t have the resources, the manpower or the capital to compete head to head with their larger counterparts.

But is it possible to level this playing field a bit? Can we change some things up that can reduce transactional costs to a non-prohibitive level for SMEs? Let’s take a look at just how the eIDAS regulation can help level the playing field by alleviating, at least partially, some of the main SME pain points.

Access to Credit 

This is a major hurdle for SMEs because of their smaller balance sheets. With eIDAS however, SME’s have the opportunity to cast a much wider net for securing credit and doing so without an extra financial burden. eIDAS will boost cross border banking which not only provides greater access to SMEs in certain underserved geographies but will also make the credit market place more competitive and lower borrowing costs.

Bid Processes 

Bidding for certain contracts can be quite an undertaking. The man hours spent on the bidding process can have a non-trivial impact on overall costs for smaller companies. They just don’t have the resources to field dedicated armies of people working on this full time. With the mechanisms that eIDAS enables, small companies can bid for contracts remotely with minimal additional documentation. Rather than having dozens of regional offices, the bidding can happen remotely with both parties being confident about the identity of the other.

Trade and Trade Financing 

Trade is all about speed and manual documentary processes just don’t cut it anymore. Each second that a shipment is not moving, it is probably accruing interest somewhere. With eIDAS, trade can really be sped up and made a lot more effortless. Rather than shipping around documentation back and worth and waiting for errors to be corrected, an eIDAS enabled digital trade platform can achieve the same results at a fraction of the time. Here is a more in-depth discussion on eIDAS and Trade.

eInvoicing 

Although this might not be as big a cost centre, it certainly matters for SMEs with limited resources. Electronic Invoicing allows companies to not only reduce overheads, but reduce their working capital cycle as well. They can reduce the time it takes to receive payments, eliminate printing or storage costs and, most importantly, reduce the headache of dealing with various national laws across jurisdictions.  

Effective management of Accounts Payables and Receivables can really provide SMEs (especially in capital intensive businesses) with the financial leverage to turn a profit.

Cyber security 

Cyber security probably takes the cake for being the number 1 headache for large companies in 2019, at least in terms of additional capital outlays. However, SMEs are probably even more vulnerable to these threats as well as more sensitive to the consequences of a breach.

eIDAS-enabled identity, authenticating and trusts services can help them stay safe without breaking the bank.

References and Further Reading

• Benefits of the eIDAS Toolbox – Case Studies from Various Industries (Part 1) (2018), by Gaurav Sharma

• Benefits of the eIDAS Toolbox – Case Studies from Various Industries (Part 2) (2018), by Gaurav Sharma

• Digital Trade and Trade Financing - Embracing and Shaping the Transformation (2018), by SWIFT & OPUS Advisory Services International Inc
• REGULATION (EU) No 1316/2013 establishing the Connecting Europe Facility, amending Regulation (EU) No 913/2010 and repealing Regulations (EC) No 680/2007 and (EC) No 67/2010(12/2013), by the European Parliament and the European Council

• Selected articles on Electronic Signing and Digital Signatures (2014-today), by Ashiq JA, Gaurav Sharma, Guillaume Forget, Jan Kjaersgaard , Peter Landrock, Torben Pedersen, Dawn M. Turner, and more

• Selected articles on Authentication (2014-today), by Heather Walker, Luis Balbas, Guillaume Forget, Jan Kjaersgaard, Dawn M. Turner and more

• eIDAS webinar 1: Using electronic Identification, Authentication and trust Services for Business (2018), by the European Commission
• The European Interoperability Framework - Implementation Strategy (2017), by the European Commission
• Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (2016), by the European Commission

• REGULATION (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (2016), by the European Parliament and the European Council

• Proposal for a REGULATION concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC (Regulation on Privacy and Electronic Communications), (2017), by the European Parliament and the European Council

• Revised Directive 2015/2366 on Payment Services (commonly known as PSD2) (2015), by the European Parliament and the Council of the European Union
• REGULATION (EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC (2014) by the European Parliament and the European Commission

• DIRECTIVE 2013/37/EU amending Directive 2003/98/EC on the re-use of public sector information (2013) by the European Parliament and the Council