Every month, across thousands of small businesses in Europe, the same scenario plays out: a finance manager, or sometimes the founder, logs into four different systems, pulls data from three bank accounts, manually reconciles payments, and attempts to forecast cash flow with a patchwork of spreadsheets.
It’s not that the tools don’t exist. It’s that the systems don’t talk to each other. And the burden of piecing them together falls on businesses that already run lean. Beyond simple convenience, for SMEs, complexity is a threat to growth, and sometimes survival.
So when the conversation shifts to AI and embedded finance, it’s worth asking: Are we solving real problems? Or just adding more layers?
Kunal Galav, who leads embedded finance at Pleo, is clear about where the real opportunity lies: “The biggest pain point for small businesses is managing day-to-day operations, money in, money out, and the complexity around it. AI only matters if it simplifies that.”
Talk of generative AI is everywhere. But for SMEs, the real value lies in how these models reduce the cost of running a business, not in a flashy tech way for its own sake. For Kunal, it’s about context. “It’s not about throwing insights at people. It’s about giving the right advice at the right time, without asking them to log into five different platforms or ask the right question on ChatGPT.”
That means nudges at the point of spend: “You just spent €50,000 on Meta ads. That’s 20% more than your peers. Are you sure?” Or early warnings: “You’ll run out of cash on day 26 if current trends continue.”
This is about delivering real-time, relevant recommendations, what Kunal calls reasoning models: “Analytics tell you what’s happening. Reasoning tells you what to do next.”
Embedded Finance + AI: Quietly Transformative
Most SMEs don’t care about the term “embedded finance.” They care about having funds available, paying vendors, covering payroll, and knowing whether they can invest in growth this quarter.
Embedded finance works best when it’s invisible, when financial services are woven into workflows and AI can anticipate needs before they arise.
“SMEs don’t want to think about their stack,” Kunal says. “They want systems that act like they know them.” Whether it’s spend control, forecasting, or policy compliance, AI becomes the interface between fragmented systems and intelligent action.
It’s what Galav calls the digital CFO, not replacing humans, but augmenting them. Giving decision-makers clarity, control, and time to focus on running the business instead of chasing data.
Want to see how top financial institutions and fintechs are actually using AI?Apply now for a seat at our upcoming Breakfast Seminar here. November 11th, Scandic Spectrum, Copenhagen.
Efficiency is a Competitive Advantage
For SMEs, time is leverage. Removing hours of manual work each week is more than a process win, it’s a strategic shift. And the numbers prove it. According to Kunal:
• SMEs using Pleo see 30% cost savings in finance teams
• 70% of spend gets automatically processed from transaction to bookkeeping
• Up to 90% of time saved on manual reconciliations
That’s what real innovation looks like, not doing different things, but doing things differently, removing friction and increasing efficiency. “More than just saving time,” Kunal says, “you free up the mental space for business owners and their teams. That’s the real competitive edge.”
The Reality Check: What’s Still in the Way?
Despite rapid adoption, Kunal cautions against believing the AI hype. “There was a McKinsey study that said 90% of AI products haven’t delivered ROI,” he notes. “Everyone’s building agent tech and jumping on trends. But few are solving the real, fundamental SME problems: cash flow and time.”
There’s also fragmentation. “Accounting providers are doing their part. HR systems are trying. Banks are adding features. But no one’s bringing it all together.” The opportunity, he says, is in connecting the dots, so that every financial decision, from payroll to procurement, becomes smarter by default.
Building at Scale: Why Infrastructure Matters
Partnerships like the one between Pleo and AWS are crucial to making this scale work.
Over the last decade, Pleo has built its entire financial stack, cards, payments, spend management, natively on AWS. That foundation has allowed them to go from simple expense tools to comprehensive embedded spend management, serving 40,000 SMEs in 16 countries.
“AWS has enabled us to scale fast, deploy AI capabilities at the edge, and deliver features like proactive policy management and intelligent advisory,” says Kunal.
In short: tech built for SMEs, not just retrofitted from consumer banking.
AI will change finance. But not through hype, rather through practical simplification. SMEs don’t need a chatbot in every corner. They need fewer logins, better visibility, and advice that arrives before the problem occurs.
That’s the critical work that needs to happen. The rest is noise.
Want to see how top financial institutions and fintechs are actually using AI?Apply now for a seat at our upcoming Breakfast Seminar here. November 11th, Scandic Spectrum, Copenhagen.