3 FinTech Trends You Should Pay Attention To

The FinTech sector has witnessed several innovative directions in the past few decades, spanning from a humble start in the 1950s with the introduction of credit cards up until where we are today; a rapid evolutionary road that is branching out endlessly into the future of a tech-empowered financial world.

The FinTech sector has witnessed several innovative directions in the past few decades, spanning from a humble start in the 1950s with the introduction of credit cards up until where we are today; a rapid evolutionary road that is branching out endlessly into the future of a tech-empowered financial world.

B2B Payments
              Slowly but almost surely, consumers are heading towards a cashless digital financial future, based on a recent past and present that is witnessing a decline in the usage of physical wallets, checks and similar icons of traditional finance. Simultaneously, there’s an outstanding increase in digital payment and transaction solutions worldwide. The unbanked population, for instance, now has access to similar services as the banked simply through their mobile phones, allowing developing countries to circumvent their limitations and perform banking tasks at their convenience. A good example of that is Kenya’s

As far as banks underserving sectors go, B2B payments is probably at the top of the list. Business payments are defined by tedious physical paperwork, rigid process and overall complexity; all of which can be automated and overcome by FinTech solutions, where they would act as substitutes for traditional banks.

Up-and-comers in in the B2B Payments sector include WorldRemit, which facilitates cross-border money transfers to pay employees and contractors. Then there are brands like Ripple that rely on Blockchain technology for building global P2P payment networks; a technology that is the subject of much controversy since its inception. Fleetcor is a company that has been recently assembling a portfolio of B2B payment companies over the past years, such as Nvoicepay and others.

B2B Lending
              Bank loans have a reputation for being tiring and hard to obtain, whereas FinTech companies using big data and advanced technologies to speed up underwriting and create new financing options for a wider range of people are almost emerging on a daily basis. The B2B ecosystem should see an increase in business lending services by FinTechs, especially for small and medium enterprises. Such companies that offer business loan options include Lending Club, OnDeck and Brex, which has recently become a unicorn through its latest funding round.

Another market player is Surecomp which offers an API that connects bank systems to corporate systems to extract information such as invoices and trade contracts. Similar entrants include startups MarketInvoice and Invoice Fair, a Canadian firm that offers a suite of tools for businesses to offer customer financing called Ario and Finexkap.

Better bank offerings for businesses
                              FinTechs and banks have had their clashes, but overall the future seems to be developing into a collaborative model between the two powerhouses. Their relationship is slowly taking shape as banks begin to embrace FinTechs and the latter is releasing some pressure that was previously exerted. The cycle makes sense, as FinTechs bring the tech aspect on board and banks bring everything else to the financial table.

Partnerships are likely to increase with some banks such as JPMorgan Chase acquiring FinTechs, leading to a possible merging of the two moving forward; a notion already taking shape, with the rise of digital banks. This mutually beneficial symbiotic relationship is bound to translate into much better offerings for businesses, connecting the B2B sector to the current popularity and trend of consumer-centric FinTech products & services.

Tags
                  B2B Payments, B2B Lending, B2B, JPMorgan Chase, Digital Banks, WorldRemit, Fleetcor, Nvoicepay, Surecomp, MarketInvoice, Invoice Fair, Ario, Finexkap, Lending Club, OnDeck, Brex, Blockchain, Ripple