The COVID-19 pandemic created massive uncertainty across all industries, changing everything from how work is done to how products are made. The financial industry was no different. Without a clear future, planning became more of a guessing game, and confidence in markets was shaken.
However, by the end of 2020, the financial industry and fintechs found their footing again, and responding to the pandemic gave way to recovery. That has been the marker of 2021. Things are slowly getting back to normal and businesses are more sure of themselves.
We’re seeing definite trends in fintech. These are the top six we’ve identified.
Focused on Improving Cash Flow
The uncertainty and instability the pandemic caused businesses to ensure that cash flow was sufficient to maintain operations and, hopefully, fund growth. Cash on hand meant safety in tenuous times. We saw businesses reinforcing the need for positive cash flow to ride out the pandemic storm.
Many addressed what they could control - accounts receivable. An efficient and effective A/R operation was the quickest and easiest way to increase cash flow. Getting invoices sent quickly or rewarding on-time payers get money in your pocket quicker and adds a layer of protection during uncertain times.
Increased B2B Payment Options
Improving cash flow also means making it easier for customers to pay. The pandemic meant that contactless payments were now the norm and businesses would need to be more flexible with how payments were made.
This was especially true for B2B companies. Expanding payment options to include virtual cards instead of traditional credit cards, borderless payments to easily send money internationally, or cryptocurrencies is proactively working with customers to make sure accounts are paid on time and in full.
We surveyed clients as part of our State of B2B Payments webinar and found that almost two-thirds of B2B businesses were at the very least considering accepting virtual cards or borderless payments. Cryptocurrencies trailed at 40 percent, but that may change as the industry matures.
Cloud is King
The pandemic turned a significant portion of the workforce into remote employees. That meant that systems that lived on-premise had to move to the cloud in order for workers to access them. Storage, applications, and operations are all moving to public and private cloud providers, with hybrid cloud solutions increasing in popularity.
Increased Efficiency with Automation
Automation enables businesses to do more while spending less, which has been vital during the pandemic. Turning manual processes into automated workflows maintains standard levels of operations while freeing staff to do work that transforms the business. The pandemic only increased this as in-person work significantly decreased.
There was particular growth in “run the business” functions. Everything from IT provisioning to human resources processes to accounts receivable saw significant growth. Fintech companies used automated solutions to enhance e-commerce customer experiences, accounting workflows, and key financial processes.
More Software Partnerships
Relatedly, SaaS solutions are increasingly becoming the norm. Growth and mature companies are finding significant business value in leveraging third-party solutions to handle regular, repeated processes. This allows them to use time and resources on more impactful work that grows the business instead of simply maintaining it.
Leveraging cloud solutions is the quickest and easiest path to maximum efficiency.
Building Fully-Integrated Systems
Building a SaaS-driven environment cannot be siloed. Systems must work in concert to ensure that data is shared between each and workflows are set up to be completed quickly and accurately. API integrations must be taken into consideration when selecting a vendor.
Ideally, all related SaaS solutions work well together and create a robust environment that operates seamlessly from application to application. Vendor selection should not happen in a vacuum. Your greater IT infrastructure must get full consideration before onboarding a new solution.
Keeping Up with the Future of FinTech
Financial technology is ever-changing and sometimes goes in unexpected directions. The pandemic has accelerated the adoption of things like automation and new forms of payment quicker than expected.
Companies that accept and embrace this change will have a leg up in the market.
For more information, view the latest Invoiced webinar, the State of B2B Payments.