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Fintech, Bank Collaboration Creates Wins for Customers
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As the fintech industry grows, it seems logical that the rivalry between these upstarts and the traditional financial services sector would only increase. The U.S. fintech industry, which is predicted to grow at a compound average annual growth rate of 10.1 percent through 2027, continues to launch products and services aimed at disrupting multiple aspects of the financial services sector.
However, a growing number of entrepreneurs are seeking to harness the power of fintech innovation to help the traditional financial services industry evolve. Dion Lisle, founder/managing partner at Forty Grand, is one such entrepreneur dedicated to leveraging technology for the benefit of America’s community banks. Ernest Rolfson, founder and CEO of Finexio, hosted Lisle on the B2B Cashflow Conversations podcast to discuss how fintech's and banks can benefit from such alliances.
In introducing Lisle, Rolfson noted his deep background in fintech start-ups and consulting firms, including his start-up Facere, which was designed as a sort of ‘Rosetta Stone’ between banks and fintech's. “Banks really have a challenge navigating the fintech arena, so tell us about how you came up with the Rosetta Stone analogy and about the barriers that you and I realize but many others don’t?” Rolfson asked.
“I came up with the analogy when I was doing a podcast at Money 2020 Europe,” Lisle said. “My daughter was studying Hindi and became fluent using the Rosetta Stone app. I realized that there was a huge language barrier between banks and fintech's because I’ve been on both sides. There’s not only a language barrier, but the way they operate, the way they look at things — everything is different, like two gears that won’t mesh.”
“I never bought the idea that fintech's were going to eliminate banks,” he continued. “I never bought that narrative; I’ve always thought they needed each other. I really wanted to be the Rosetta Stone quite literally between these two disparate worlds to deliver better value for customers, whether they were B2B or B2C.”
“What are some of the specific barriers that you’ve seen and how have you helped navigate them?” Rolfson inquired.
“You’ve heard the expression ‘culture eats technology for lunch,’ right?” Lisle replied. “It’s always down to people. You and I both know it is hard to get people to understand the value of technology and how it improves their work. My approach now in these situations is to start with the people and try to get them to understand that we’re here to make your job better. We’re not here to replace you. Digital is a tool for you to offer better service. I tell community banks all the time, personal service plus digital service equals concierge service.”
“A lot of organizations in the community bank space must come in with a low-tech environment, is that fair to say?” Rolfson asked.
“Worse, because they may have a consultant like Jack Henry and they just do what they’re told, which means they are a captive audience to a narrow view of technology.” Lisle replied.
“Tell us about your Forty Grand venture and the value that you want to bring to community banks,” said Rolfson. “What was your inspiration for founding this new venture?”
“After three plus years with Facere, I realized that the hardest part of my job was dealing with mega banks,” he said. “I met Mike and Carlton, my partners in Forty Grand, who have worked with community banks. Community banks between $300 million and $5 billion in assets aren’t large enough to have a chief technology officer, nor should they, but there is a tremendous opportunity with these banks to add value to their footprint with digital. They don’t need a giant digital transformation program with PwC or Accenture.”
Rolfson agreed, saying, “That gets everything upside down, changing their whole back office, going to the cloud, doing everything.”
“Exactly,” said Lisle. “Digital transformation in this situation is too big to succeed and will fail later in something like 80 percent of the cases. Instead, I talk about one process at a time.”
In response, Rolfson remarked, “It’s almost like driving up the value for the community banks by being more laser focused, delivering a purpose-built solution for the specific bank pain point.”
“Yes,” said Lisle. “It’s about fixing a process, finding a method to get your customers digitally engaged.”
“What’s the benefit to the end user?” Rolfson asked.
“Fair question,” Lisle replied. “Community banks are obsessed with their end user experience. They think a lot about their small business customers. The pandemic has shown us a lot of the value in local businesses. The small and medium sized business (SMB) customers of these banks need more than a nice relationship, they are demanding digital.”
Rolfson and Lisle agreed that providing community banks with outsourced digital technology expertise was a win for both the banking and fintech industries. More banks than ever are realizing the value-add of fintech, including Banc of California, which recently invested in and partnered with Finexio. The two organizations plan on launching an AP B2B payments and working capital platform by the second quarter of 2022.
Learn more about how fintech capabilities can create a seamless payment experience for your business customers. Contact us for a consultation.
Watch the full episode of “B2B Cashflow Conversations” with guest, Dion Lisle.
Veem Leverages the Power of Finexio for Small Business Payments
For decades, small businesses have operated at a payments and cash flow disadvantage. Traditional financial organizations were oriented towards larger businesses, discounting the needs of small businesses for strong cash flow and efficient payments.
In fact, the cash flow needs of small businesses have only escalated since the beginning of the Covid-19 pandemic in March 2020. More than 50 percent of small businesses surveyed by Mercator Advisory Group report that their cash flow concerns have increased or increased significantly.
Fortunately for entrepreneurs across America, Veem’s payment ecosystem allows small businesses of all sizes to make and receive payments rapidly and at a reasonable cost. In an episode of the B2B Cashflow Conversations podcast, Finexo Founder and CEO Ernest Rolfson spoke with Marwan Forzley, CEO and Founder of Veem.
Like Finexio, Veem was founded to create a seamless payment experience, eliminating the friction that characterizes traditional small business payment platforms. Veem not only facilitates payments within the U.S., but it also expedites overseas payments. Regardless of where a payment originates and ultimately ends up, Forzley’s objective is to create as seamless an experience as possible, an attitude that Rolfson shares.
“Veem is oriented towards whatever the customer wants to do — domestic, international, cross border, foreign exchange,” said Forzley. “We have a different approach in that it’s very customer-centric.”
Solving customer pain points
“What are the typical problems you’re solving for your customers?” Rolfson asked.
“They’re looking for a simple way to move their money around, to pay or get paid,” he replied. “For example, if I have a business in California, I might want to pay a supplier in New York. I don’t have their bank account information on me, that would take some time to figure out. Instead, Veem lets them log into their account and send an email out with the payment. Our service is similar to Venmo, Square Cash or Zelle, but for businesses.”
“Essentially, you’ve removed the friction,” Rolfson said.
“That’s a key value proposition — the simplicity of the experience,” Forzley agreed. “Because when you’re doing domestic payments, you are generally doing ACH, checks, cards or wires. Wires are the bigger instrument for larger transactions. What we’re doing is basically giving you the ability to make payments of any size, pulling money from one side and depositing it on the other side.”
Adding checks to the payment platform
Rolfson noted the collaboration between Veem and Finexio that occurs in domestic payments, specifically in the check space. To assist its customers as fully as possible, Veem uses many different modalities to transmit payments, including Finexio’s network.
“We teamed up with Finexio during the pandemic when we got feedback from our customers that they wanted to spend using checks, which is kind of odd since you would assume that since people were at home, they would want to do electronic payments,” replied Forzley.
“The way we manage a check payment is different,” continued Forzley. “When the check is sent, the receiver gets a notification with an expected delivery time. When they are notified that the check has arrived, they can go actually pick it up. It’s marrying new technology with an old payment method — the new technology is the ability to track and refine delivery times and the old is actually paying by check.”
“Could you tell me why rolling out a new payment modality — in this case, checks with Finexio — is important to you and your customers?” Rolfson asked. “I’d love to learn more about your thinking behind what you call Veem local, which is your attitude towards being a comprehensive payment solution.”
“Being local is really the concept of having businesses in local markets that pay locally and want choice in their payments,” Morzley explained. “They can pay by check, card, ACH whatever they want. It turned out that there were situations in which the payer and the payee found checks appealing, especially when packaged with this new technology. So, we ended up teaming up with you to do it. I go with whatever the customer wants — because that’s what we do for them, fulfill their payment needs.”
Rolfson asked Forzley if the experience of expanding into checks is a way to expand their market share or if there was other reasoning behind this addition of a new payment modality to the Veem platform.
“We think of it primarily as the opportunity to deliver a delightful simple experience to our customers,” replied Forzley. “As a result of that, we end up getting more share of the payments wallet from our customers. Share of wallet is a by-product of simpler things — essentially that I am giving you a different experience, the experience is life long and you get what you need today.”
Learn more about how fintech capabilities can create a seamless payment experience for your customers. Contact us for a consultation.
Watch the full episode of “B2B Cashflow Conversations” with Marwan Forzley.
SMB’s Face Unique Challenges — Fintech Has Solutions
Small and medium sized businesses power the American economy. Firms with fewer than 500 employees employ more than half of the country’s private workforce.
Gartner defines small and medium sized businesses by number of employees and annual revenue. Small businesses are defined as those with 100 or fewer employees with less than $50 million in annual revenue. Medium sized businesses are then described as companies with 100 to 999 employees and with annual revenue between $50 million and $1 billion.
Although small and medium sized businesses are vital to the economy, these companies and their leaders experience many distinct struggles, including ongoing concerns about cash flow. Nearly half of the 2,000 small businesses surveyed indicated they were either concerned or very concerned about their cash flow, according to a study conducted by Mercator.
Clearly, there’s a role for fintech in helping SMBs solve cash flow and other problems. In a recent episode of the B2B CashFlow Conversations Podcast, Finexio founder and CEO Ernest Rolfson interviewed Dion Lisle, founder and partner of Forty Grand, a consulting company that helps community banks leverage the power of technology, about the ways that fintech can assist SMBs.
In Lisle’s experience with community banks, which the U.S. Federal Reserve Board defines as those with assets of less than $10 billion, these entities are interested in technology for the benefits it can provide for their customers. “In contrast to the big banks, community banks will say our customers need this or our customers asked us about that, or we need to deliver this to our customers,” he said. “They are much more about service, about believing that their reputation matters and their customers matter.”
“When talking about the big boys, the top five biggest banks, I think most people would agree that they care less about customers and more about what type of commodity they can push out there,” Rolfson observed.
“It’s all about quarterly results, right?” Lisle agreed.
Given Finexio’s and Forty Grand’s focus, Rolfson wondered how fintech solutions in areas such as AP automation, B2B payments, treasury cash flow and working capital management could benefit SMBs.
Lisle mentioned that he was speaking to a community banker about increasing efficiencies through technology and that banker mentioned how helpful it would be if there was technology available so that he could pull his SMB customer’s QuickBooks accounting records, analyze it and make recommendations for the future.
“I told him that was definitely doable,” he said. “But when you’re used to going out with a notebook, taking notes, coming back to the office, analyzing it and then making recommendations, that would be a big change. Imagine if you could do that with say an electrician’s business and go back to him and tell him that from analyzing his business it looks like he’s going to need a new truck. Then, you could offer him a working capital loan to buy that truck. The guy I was talking with was like, ‘What? We could do that?’ I told them that’s basic stuff, it wouldn’t even be that hard. And they were blown away.”
“I think that education is definitely needed so that small and medium sized businesses like your community banks understand that digital tools enable richer personal interactions and actual, more meaningful customer engagement,” Rolfson said in response. “On the predictive side, leveraging trends and analytics is not that complicated — you don’t need AI or machine learning to get to the core of what a $10 million business needs.”
For community banks and other types of SMBs, Lisle recommends starting with data hygiene, data structure, data strategy and data schema to get executives and managers to understand what data is available and what it means. Then, the SMB can proceed into gap analysis, a process audit followed by data strategy. Once those things are in place, the table is set to make other moves that will help customer engagement and drive success for the business and their customers.
Rolfson agreed, noting that in the middle market and the small business market, big banks haven’t delivered for those customers. An SMB CFO who needs help in financial services is more likely to get on Google to try to find help with software or accounting or accounts payable instead of going to a big bank. With these trends, both Rolfson and Lisle agreed that banks, especially large banks, are at more risk than ever of being disintermediated from their customers, especially SMBs.
Learn more about how fintech can improve cash flow for SMB’s. Read our latest report, “Evolving Supplier Payments into an Engine for BusinessGrowth”.
Catch the full episode of “B2B Cashflow Conversations” with guest Dion Lisle below.
Sources:
- “How Small Business Drives U.S. Economy,” ThoughtCo., July 26, 2021, https://www.thoughtco.com/how-small-business-drives-economy-3321945
- Small and Midsize Businesses (SMB), Gartner Group, https://www.gartner.com/en/information-technology/glossary/smbs-small-and-midsize-businesses
- “Report: Small and Medium Businesses (SMBs) Are Concerned About Cash Flow,” Payments Journal, March 11, 2021, https://www.paymentsjournal.com/report-small-and-medium-businesses-smbs-are-concerned-about-cash-flow/
- “Community & Regional Financial Institutions,” U.S. Federal Reserve Board, Sept. 15, 2021, https://www.federalreserve.gov/supervisionreg/community-and-regional-financial-institutions.htm
Structural Changes Attract Customers, Investors to Fintech
For decades, customers and investors were at the mercy of traditional financial services companies. Whether you like the companies and their business models or not, if you wanted payment, loan or deposit services, that’s where you had to go from the customer point of view. If you were an investor who wanted to diversify into financial services, the question was similar because there wasn’t much differentiation between the various options.
Today, fintech has revolutionized the playing field in financial services for customers and investors. Customers can choose to take some or all of their business outside of the traditional financial services arena just as investors can favor fintechs over traditional banks, investment companies and other financial services firms.
The pandemic has only speeded the transition to more choice and more democracy within financial services for both consumers and investors as fintechs continue to build muscle.
In a B2B CashFlow Conversations Podcast hosted by Finexio CEO and Founder Ernest Rolfson, Rolfson interviewed Marwan Forzley, CEO and Founder of Veem, a domestic and international B2B payments company.
“It used to be, pre-pandemic, that we would shop in-person first and then online for what we couldn’t find at the local stores,” Forzley said. “Today, we shop online first unless you’re really stuck and can’t wait for something to get shipped — that’s one trend. The second trend is that it used to be you’d start a business, open an office, find people to work there and pay them by direct deposit from a bank. Today, with so many people working remotely, your staff can be from anywhere and you need to be ready to pay them anywhere.”
“There’s also the rise of more types of payments both domestically and overseas,” he continued. “I think crypto [currency] is here to stay despite the dismissiveness of many who believe that it won’t remain because of a lack of intrinsic value.”
“There’s a big takeaway here that many people don’t understand crypto and that it’s not going anywhere,” agreed Rolfson. “It’s very serious and very real.
Rise of fintechs as neobanks
Forzley also spoke on other trends he is seeing. “The rise of neobanks is interesting in that fintechs are offering services and experiences that are encroaching on the territory of banks but are different than banks,” Forzley said. “I think we are going to see more B2C and B2B neobanks. The market is complicated, so it requires massive simplification over a long period of time, which means that a number of players will emerge to make that happen.”
“It sounds like you’re in the right spot,” commented Rolfson. “What are your thoughts on the timing and speed of payments and how that is evolving?
“This is a great topic — thanks for bringing it up,” Forzley replied. “I think the work Finexio is doing in this area is quite valuable for customers. Capital and payments are close cousins. If you ask a customer what else you can do for them, besides payments, they usually ring up lending. I think there is a lot of room in this market, which will be a key area in the future.”
In 2020 Finexio launched FinexioCash™, which allows suppliers to get paid upon invoice approval. The solution was designed specifically to help U.S. mid-market companies and their suppliers unlock much needed cash to survive and thrive in a more volatile world.
“There is a natural connection,” Rolfson said. “I really think of fintech and what Veem and Finexio are doing as being akin to rail and infrastructure providers. This is stuff that banks could and should do because at the end of the day, everyone has a bank account. It is incumbent upon us as fintechs to make these products and services available in one package, because customers are starting to use Veem, Finexio and others without even thinking to call Chase, Bank of America, or other traditional banks. This is becoming more natural behavior.”
“Customers don’t think twice, when they get in an Uber for example, how they are going to pay for it,” Rolfson continued. “Because they can just press a few buttons on their phone. There is an opportunity for Finexio, Veem and other fintechs to bundle these products and services together that are beneficial for the consumer.”
“This is the reason why fintech exists,” Forzley said. “We provide what is not being offered by traditional providers like banks.”
More choice for investors
For investors, the rise of neobanks and fintechs are filling the gaps left open by banks and creating their own niches, offering abundant investing opportunity. A number of prominent fintechs are expected to go public in 2022, including Stripe, Instacart, Klarna, and Chime. This is following a banner 2021 in which Robinhood, Blend, Freshworks, Remitly, NerdWallet, Expensify, Nubank, Coinbase, Billtrust, Metromile and SoFi all went public.
Going forward, both investors and consumers in both B2B and B2C are likely to benefit from more choice and innovation.
Want to learn more about Finexio? Contact Us or Book a Meeting to speak with a B2B payments expert and start saving time and money.
Be sure to check out this episode of our ‘B2B Cashflow Conversations’ podcast with Marwan Forzley, Founder & CEO of Veem.
Fintech, Bank Collaboration Creates Wins for Customers
As the fintech industry grows, it seems logical that the rivalry between these upstarts and the traditional financial services sector would only increase. The U.S. fintech industry, which is predicted to grow at a compound average annual growth rate of 10.1 percent through 2027, continues to launch products and services aimed at disrupting multiple aspects of the financial services sector.
However, a growing number of entrepreneurs are seeking to harness the power of fintech innovation to help the traditional financial services industry evolve. Dion Lisle, founder/managing partner at Forty Grand, is one such entrepreneur dedicated to leveraging technology for the benefit of America’s community banks. Ernest Rolfson, founder and CEO of Finexio, hosted Lisle on the B2B Cashflow Conversations podcast to discuss how fintech's and banks can benefit from such alliances.
In introducing Lisle, Rolfson noted his deep background in fintech start-ups and consulting firms, including his start-up Facere, which was designed as a sort of ‘Rosetta Stone’ between banks and fintech's. “Banks really have a challenge navigating the fintech arena, so tell us about how you came up with the Rosetta Stone analogy and about the barriers that you and I realize but many others don’t?” Rolfson asked.
“I came up with the analogy when I was doing a podcast at Money 2020 Europe,” Lisle said. “My daughter was studying Hindi and became fluent using the Rosetta Stone app. I realized that there was a huge language barrier between banks and fintech's because I’ve been on both sides. There’s not only a language barrier, but the way they operate, the way they look at things — everything is different, like two gears that won’t mesh.”
“I never bought the idea that fintech's were going to eliminate banks,” he continued. “I never bought that narrative; I’ve always thought they needed each other. I really wanted to be the Rosetta Stone quite literally between these two disparate worlds to deliver better value for customers, whether they were B2B or B2C.”
“What are some of the specific barriers that you’ve seen and how have you helped navigate them?” Rolfson inquired.
“You’ve heard the expression ‘culture eats technology for lunch,’ right?” Lisle replied. “It’s always down to people. You and I both know it is hard to get people to understand the value of technology and how it improves their work. My approach now in these situations is to start with the people and try to get them to understand that we’re here to make your job better. We’re not here to replace you. Digital is a tool for you to offer better service. I tell community banks all the time, personal service plus digital service equals concierge service.”
“A lot of organizations in the community bank space must come in with a low-tech environment, is that fair to say?” Rolfson asked.
“Worse, because they may have a consultant like Jack Henry and they just do what they’re told, which means they are a captive audience to a narrow view of technology.” Lisle replied.
“Tell us about your Forty Grand venture and the value that you want to bring to community banks,” said Rolfson. “What was your inspiration for founding this new venture?”
“After three plus years with Facere, I realized that the hardest part of my job was dealing with mega banks,” he said. “I met Mike and Carlton, my partners in Forty Grand, who have worked with community banks. Community banks between $300 million and $5 billion in assets aren’t large enough to have a chief technology officer, nor should they, but there is a tremendous opportunity with these banks to add value to their footprint with digital. They don’t need a giant digital transformation program with PwC or Accenture.”
Rolfson agreed, saying, “That gets everything upside down, changing their whole back office, going to the cloud, doing everything.”
“Exactly,” said Lisle. “Digital transformation in this situation is too big to succeed and will fail later in something like 80 percent of the cases. Instead, I talk about one process at a time.”
In response, Rolfson remarked, “It’s almost like driving up the value for the community banks by being more laser focused, delivering a purpose-built solution for the specific bank pain point.”
“Yes,” said Lisle. “It’s about fixing a process, finding a method to get your customers digitally engaged.”
“What’s the benefit to the end user?” Rolfson asked.
“Fair question,” Lisle replied. “Community banks are obsessed with their end user experience. They think a lot about their small business customers. The pandemic has shown us a lot of the value in local businesses. The small and medium sized business (SMB) customers of these banks need more than a nice relationship, they are demanding digital.”
Rolfson and Lisle agreed that providing community banks with outsourced digital technology expertise was a win for both the banking and fintech industries. More banks than ever are realizing the value-add of fintech, including Banc of California, which recently invested in and partnered with Finexio. The two organizations plan on launching an AP B2B payments and working capital platform by the second quarter of 2022.
Learn more about how fintech capabilities can create a seamless payment experience for your business customers. Contact us for a consultation.
Watch the full episode of “B2B Cashflow Conversations” with guest, Dion Lisle.
Veem Leverages the Power of Finexio for Small Business Payments
For decades, small businesses have operated at a payments and cash flow disadvantage. Traditional financial organizations were oriented towards larger businesses, discounting the needs of small businesses for strong cash flow and efficient payments.
In fact, the cash flow needs of small businesses have only escalated since the beginning of the Covid-19 pandemic in March 2020. More than 50 percent of small businesses surveyed by Mercator Advisory Group report that their cash flow concerns have increased or increased significantly.
Fortunately for entrepreneurs across America, Veem’s payment ecosystem allows small businesses of all sizes to make and receive payments rapidly and at a reasonable cost. In an episode of the B2B Cashflow Conversations podcast, Finexo Founder and CEO Ernest Rolfson spoke with Marwan Forzley, CEO and Founder of Veem.
Like Finexio, Veem was founded to create a seamless payment experience, eliminating the friction that characterizes traditional small business payment platforms. Veem not only facilitates payments within the U.S., but it also expedites overseas payments. Regardless of where a payment originates and ultimately ends up, Forzley’s objective is to create as seamless an experience as possible, an attitude that Rolfson shares.
“Veem is oriented towards whatever the customer wants to do — domestic, international, cross border, foreign exchange,” said Forzley. “We have a different approach in that it’s very customer-centric.”
Solving customer pain points
“What are the typical problems you’re solving for your customers?” Rolfson asked.
“They’re looking for a simple way to move their money around, to pay or get paid,” he replied. “For example, if I have a business in California, I might want to pay a supplier in New York. I don’t have their bank account information on me, that would take some time to figure out. Instead, Veem lets them log into their account and send an email out with the payment. Our service is similar to Venmo, Square Cash or Zelle, but for businesses.”
“Essentially, you’ve removed the friction,” Rolfson said.
“That’s a key value proposition — the simplicity of the experience,” Forzley agreed. “Because when you’re doing domestic payments, you are generally doing ACH, checks, cards or wires. Wires are the bigger instrument for larger transactions. What we’re doing is basically giving you the ability to make payments of any size, pulling money from one side and depositing it on the other side.”
Adding checks to the payment platform
Rolfson noted the collaboration between Veem and Finexio that occurs in domestic payments, specifically in the check space. To assist its customers as fully as possible, Veem uses many different modalities to transmit payments, including Finexio’s network.
“We teamed up with Finexio during the pandemic when we got feedback from our customers that they wanted to spend using checks, which is kind of odd since you would assume that since people were at home, they would want to do electronic payments,” replied Forzley.
“The way we manage a check payment is different,” continued Forzley. “When the check is sent, the receiver gets a notification with an expected delivery time. When they are notified that the check has arrived, they can go actually pick it up. It’s marrying new technology with an old payment method — the new technology is the ability to track and refine delivery times and the old is actually paying by check.”
“Could you tell me why rolling out a new payment modality — in this case, checks with Finexio — is important to you and your customers?” Rolfson asked. “I’d love to learn more about your thinking behind what you call Veem local, which is your attitude towards being a comprehensive payment solution.”
“Being local is really the concept of having businesses in local markets that pay locally and want choice in their payments,” Morzley explained. “They can pay by check, card, ACH whatever they want. It turned out that there were situations in which the payer and the payee found checks appealing, especially when packaged with this new technology. So, we ended up teaming up with you to do it. I go with whatever the customer wants — because that’s what we do for them, fulfill their payment needs.”
Rolfson asked Forzley if the experience of expanding into checks is a way to expand their market share or if there was other reasoning behind this addition of a new payment modality to the Veem platform.
“We think of it primarily as the opportunity to deliver a delightful simple experience to our customers,” replied Forzley. “As a result of that, we end up getting more share of the payments wallet from our customers. Share of wallet is a by-product of simpler things — essentially that I am giving you a different experience, the experience is life long and you get what you need today.”
Learn more about how fintech capabilities can create a seamless payment experience for your customers. Contact us for a consultation.
Watch the full episode of “B2B Cashflow Conversations” with Marwan Forzley.
Structural Changes Attract Customers, Investors to Fintech
For decades, customers and investors were at the mercy of traditional financial services companies. Whether you like the companies and their business models or not, if you wanted payment, loan or deposit services, that’s where you had to go from the customer point of view. If you were an investor who wanted to diversify into financial services, the question was similar because there wasn’t much differentiation between the various options.
Today, fintech has revolutionized the playing field in financial services for customers and investors. Customers can choose to take some or all of their business outside of the traditional financial services arena just as investors can favor fintechs over traditional banks, investment companies and other financial services firms.
The pandemic has only speeded the transition to more choice and more democracy within financial services for both consumers and investors as fintechs continue to build muscle.
In a B2B CashFlow Conversations Podcast hosted by Finexio CEO and Founder Ernest Rolfson, Rolfson interviewed Marwan Forzley, CEO and Founder of Veem, a domestic and international B2B payments company.
“It used to be, pre-pandemic, that we would shop in-person first and then online for what we couldn’t find at the local stores,” Forzley said. “Today, we shop online first unless you’re really stuck and can’t wait for something to get shipped — that’s one trend. The second trend is that it used to be you’d start a business, open an office, find people to work there and pay them by direct deposit from a bank. Today, with so many people working remotely, your staff can be from anywhere and you need to be ready to pay them anywhere.”
“There’s also the rise of more types of payments both domestically and overseas,” he continued. “I think crypto [currency] is here to stay despite the dismissiveness of many who believe that it won’t remain because of a lack of intrinsic value.”
“There’s a big takeaway here that many people don’t understand crypto and that it’s not going anywhere,” agreed Rolfson. “It’s very serious and very real.
Rise of fintechs as neobanks
Forzley also spoke on other trends he is seeing. “The rise of neobanks is interesting in that fintechs are offering services and experiences that are encroaching on the territory of banks but are different than banks,” Forzley said. “I think we are going to see more B2C and B2B neobanks. The market is complicated, so it requires massive simplification over a long period of time, which means that a number of players will emerge to make that happen.”
“It sounds like you’re in the right spot,” commented Rolfson. “What are your thoughts on the timing and speed of payments and how that is evolving?
“This is a great topic — thanks for bringing it up,” Forzley replied. “I think the work Finexio is doing in this area is quite valuable for customers. Capital and payments are close cousins. If you ask a customer what else you can do for them, besides payments, they usually ring up lending. I think there is a lot of room in this market, which will be a key area in the future.”
In 2020 Finexio launched FinexioCash™, which allows suppliers to get paid upon invoice approval. The solution was designed specifically to help U.S. mid-market companies and their suppliers unlock much needed cash to survive and thrive in a more volatile world.
“There is a natural connection,” Rolfson said. “I really think of fintech and what Veem and Finexio are doing as being akin to rail and infrastructure providers. This is stuff that banks could and should do because at the end of the day, everyone has a bank account. It is incumbent upon us as fintechs to make these products and services available in one package, because customers are starting to use Veem, Finexio and others without even thinking to call Chase, Bank of America, or other traditional banks. This is becoming more natural behavior.”
“Customers don’t think twice, when they get in an Uber for example, how they are going to pay for it,” Rolfson continued. “Because they can just press a few buttons on their phone. There is an opportunity for Finexio, Veem and other fintechs to bundle these products and services together that are beneficial for the consumer.”
“This is the reason why fintech exists,” Forzley said. “We provide what is not being offered by traditional providers like banks.”
More choice for investors
For investors, the rise of neobanks and fintechs are filling the gaps left open by banks and creating their own niches, offering abundant investing opportunity. A number of prominent fintechs are expected to go public in 2022, including Stripe, Instacart, Klarna, and Chime. This is following a banner 2021 in which Robinhood, Blend, Freshworks, Remitly, NerdWallet, Expensify, Nubank, Coinbase, Billtrust, Metromile and SoFi all went public.
Going forward, both investors and consumers in both B2B and B2C are likely to benefit from more choice and innovation.
Want to learn more about Finexio? Contact Us or Book a Meeting to speak with a B2B payments expert and start saving time and money.
Be sure to check out this episode of our ‘B2B Cashflow Conversations’ podcast with Marwan Forzley, Founder & CEO of Veem.
Five “Secrets” Every CFO Should Know
Accounts payable has traditionally been an integral part of the business, providing a necessary function in the financial cycle. However, it is now being recognized as not just a cost center but also an opportunity to grow profits and scale your business.
In order to achieve business growth, it’s important for CFOs to focus on finding and funding solutions that will drive long-term growth. To help you understand how your AP department can lead your company to better cash flow management and drive more value, we’re revealing five “secrets” all CFOs should know.
“Secret” #1: Leverage Technology to your Advantage
Technology has revolutionized the accounts payable process, making it faster and more efficient. Automated invoice management systems can help you quickly identify and pay invoices, while supplier payment portals allow you to make payments online without having to go through a middleman. Streamlining these processes will not only free up to 84% of your AP staff’s time, but you’ll reduce costs by eliminating manual, paper-based payment processes.
“Secret” #2: Partner with suppliers to make payments faster and more convenient.
This will improve supplier relations while freeing up cash and reducing the time it takes for funds to be received. Suppliers are motivated to get their money faster and more conveniently, so it’s a great place to start. Suppliers want a say in how they get paid and will adopt a solution that provides a payment method that is fast and easy for them. As an added benefit, you can drive value back to your business with early payment discounts and cash-back benefits from rebates and incentives.
“Secret” #3: Forecast Cash Flow and Allocate Resources Accordingly
In order to make sound decisions about where to allocate its resources, a company needs to have an accurate view of its current and future cash flow position. Accounts payable can help the broader business by forecasting cash flow and providing insights into how different decisions will impact the company’s financial position.
“Secret” #4: Control Costs by Implementing Supplier Payment Best Practices
Best practices for supplier payments can help a business save money on administrative and processing costs. This includes negotiating better payment terms with suppliers, taking advantage of discounts for early payment, and using electronic payments whenever possible.
“Secret” #5: Focus on Cash Flow, Not Just Efficiencies
Cash flow is one of the most important drivers for business growth. Accounts payable can lead the way by expanding its responsibility and becoming better stewards of cash flow for their company. That starts with rethinking how paying suppliers can maximize revenue while cutting costs at every turn.
Hopefully these secrets have provided some insight into why your AP department should be focused on driving long-term sustainable revenue growth, not just controlling expenses more efficiently.
Want to learn more? We’ve got you covered! Check out our latest webinar on-demand to learn more about turning your AP department into a value driver for your business.
Payments Mythbusters: Thanksgiving Edition
Myth: Turkey's can't fly.
Fact: Sure they can! They’re just not great at it.
It’s the same with checks and ACH. Can these payment methods get the job done? Of course. There’s just a better way.
Not long ago, the traditional payments establishment and many merchants were downright skeptical about the ability of digitization to streamline and simplify B2B payments. While digital payments have had a transformational impact on the B2B payments landscape, misconceptions linger.
“There definitely remains a knowledge gap with those who perceive payments using ACH or checks as being less costly than digital models,” said Dean Leavitt, CEO & Founder of Boost Payments. “The misperception is that ACH and checks are free, but credit cards cost a lot,” he said.
Finexio aims to stuff that knowledge gap and shed light on truths that will improve your payment process and your bottom line with our series, Payments Mythbusters. In this Thanksgiving-themed edition, let’s set the record straight around digital and card payments vs checks and ACH (the turkeys of the B2B payments world).
Myth: Digital payments carry a high barrier to entry
Fact: Digital payments actually offer improved cash flow and efficiencies related to third-party processors you can hire like Boost and Finexio. One example of this reality, according to Leavitt, is the boom in digital B2B usage during the pandemic. “There’s been lots of businesses going into digital payments driven by the pandemic. People tend not to go back to checks and less efficient payment methods, once they’re hooked on the benefits of digital payments and specifically card products where they are getting that working capital.”
Digital payments allows companies to fill in gaps and continue moving their capital in the right direction, despite shortages of in-person time and interaction to process ACH and checks. Finexio has a dedicated onboarding and customer success team that shortens onboarding times and eliminates implementation and training headaches, allowing companies to focus on doing their business instead of shuffling paper and waiting for payments to clear.
Myth: Digital payments lack ROI
Fact: Finexio cuts costs associated with manual paper-based processes and the opportunity for cash back via early payment discounts and virtual card interchange. By streamlining the payment process with digital payment methods, companies can guarantee not only savings but returns through usage rewards. In addition, the security offered by digital payments will actually create the potential for transaction volume to increase. “Someone is willing to pay that fee instead of just getting a piece of paper sent to them”, Leavitt said, adding, “I see the fees associated with B2B transactions coming down significantly.”
This positions digital and commercial cards as the future of B2B payments, because as more transactions are happening, the price for executing the payments will actually decrease, resulting in an increasingly favorable environment for even more digital transactions.
Myth: Digital payments require expensive technology
Despite the beliefs of organizations and merchants that digital payments mean they have to acquire expensive technology, FinTech companies like Finexio and Boost build the technology capabilities in their back offices so that organizations and merchants can benefit from automation and technology without having to acquire or maintain it.
“The concept of embedded finance with software-enabled platforms that leads distribution for payments products, services and cash management tools, creates a powerful environment for B2B digital payments,” noted Finexio CEO & Founder, Ernest Rolfson. Because large financial institutions can afford to wait on ACH and checks due to their internal funds, they have no motivation to create the next generation of efficiencies.
“Fintech companies can move much quicker in terms of accommodating the needs of the marketplace,” Leavitt said. “You know, the large financial institutions, even the very best of them, the smartest of them, they just can’t move as quickly as a fintech can. And that’s a huge advantage in the marketplace.”
Myth: Digital Payments are Inefficient
This myth is particularly egregious, because, “Digital payments not only [extends] the working capital, the days payable outstanding for the buyer, but they reduce the days sales outstanding for the supplier, thereby increasing their working capital. That’s really the perfect win”, according to Leavitt. By using digital payment methods, companies can quite literally capitalize on new, frictionless efficiencies and keep themselves agile in a developing space, instead of waiting around for ACH and paper checks, and exposing themselves to fraud.
If you’ve bought into any of these myths, hopefully we’ve convinced you to toss them in the trash along with that turkey carcass.
Speaking of that bird….
Myth: Those plastic pop-up thermometers tell you when your turkey is cooked.
Fact: They let you know when the turkey is overcooked.
From all of us at Finexio, have a safe and happy Thanksgiving!
Do you have a payments-related myth you want busted? Tell us about it on Twitter — @finexiopayments #paymentsmythbusters.
Learn more about Finexio and how digitizing accounts payable can be an easy win. Contact our team for a consultation.
Embedded Software Allows for “Seamless” Payments Experience
As growth in the payments industry continues to accelerate, software integrations increasingly focus on simplifying the user payment experience. Payments providers that successfully facilitate a smooth end-to-end experience are capturing market share as customers on both sides of payments transactions prioritize efficiency and execution.
In a recent B2B Cashflow Conversations podcast episode with Finexio CEO and founder Ernest Rolfson, Dan Geraty, founder of Clearent, discussed the rapid evolution of the payments space and how organizations such as Clearent and Finexio can improve the payments experience.
“I think it’s interesting that as the industry invests in itself, there is much more emphasis on the experiential factor, the wow factor,” said Rolfson. “How does Clearent fit into the picture of simplifying payments and improving the user experience?
Geraty responded that within the B2B space, Clearent partners with software developers to enable payments as part of their value proposition, which improves the user experience while creating an additional revenue stream. “These partnerships are also good for customers, because they provide a much more seamless payment experience,” he noted.
“Back in 2017, we came across a company called Spot that specialized in dry cleaning store management software, which doesn’t seem super sexy,” he added. “The idea is that everyone pays for dry cleaning with a credit card, so that the intersection of payments and software created a stickier solution. The founders were ready to retire, so we acquired Spot, moving their customers to Clearent for payments. There were revenue synergies associated with this acquisition as well as improvements that we were able to make for the business and the customer experience.”
Clearent continued to acquire other companies in attractive verticals and earlier this year, merged with TSG to create Xplor. TSG is a global provider of business management software and integrated payments operating in the U.K., Australia and New Zealand that follows a similar strategy to Clearent.
“Together, we’ve created a global platform,” Geraty said. “We will continue to acquire software companies in verticals that we really like in addition to partnering with software companies where we can improve the payment experience.”
“How does acquiring and partnering with software companies help create more efficient and effective payment experiences?” Rolfson asked. “I would imagine that when you started, you didn’t necessarily imagine that you would be owning vertical specific software businesses.”
In reply, Geraty confessed that he definitely did not anticipate this twist. “But you could see it happen back when OpenEdge was bought by Global Payments,” he noted. (OpenEdge, a payments processing platform, was acquired by Global Payments in 2015). “They were doing a lot of integrations with software companies and growing like a weed as a result. We couldn’t help but take notice because in the merchant acquiring space, attrition is a major challenge unless you’ve got a real hook.”
“And software is the hook,” he continued. “It’s even more of a hook when you own it.”
“How is what you are doing different than the Stripe model, for example?” Rolfson asked. “It seems like it’s in the trend area of having credit card processing available to developers so they can embed it in their software.”
“Stripe is a terrific company that is making it really simple for companies to integrate payments into their software solution,” Geraty replied. “What we find is that Stripe is a bit of a one-size-fits-all solution. Software developers may start with Stripe, but as the software company matures, they seek a different solution with more support for themselves, more support for their customers and different pricing options.”
“Essentially, what you are saying is that everyone has a place in the industry or a specific focus?” Rolfson commented.
“Yes,” Geraty responded. “The global payments market is so huge there is plenty of room for everyone.”
Rolfson commented that this echoes some of the trends he sees at Finexio. “CFOs are not going to be buying outbound payment processing or outsourced check printing or having their back-office staff making payments over the phone with a credit card anymore. Instead, they are buying procurement software or AP software to run their businesses.”
This means that organizations can access payments expertise through embedded software, avoiding the complex and confusing aspects of engaging with payments separately, Rolfson continued. “It’s very elegant to get the payments in software development,” he added.
Both Geraty and Rolfson concluded that when payments are seamless and essentially disappear, organizations can focus on their core competencies. Leveraging companies such as Clearent and Finexio to this end means that payments can operate as a utility, so to speak, while organizations concentrate on delighting their customers and growing their businesses.
Finexio partners with 14+ software providers to make your payments easier, safer, and cost-effective for buyers and suppliers. Contact us or Book a meeting to learn more.
Check Payments are Stifling Your Business Growth
AP Payments-as-a-Service uncovers and eliminates the hidden (and obvious) costs associated with paper checks.
It’s no secret that it costs a lot more to initiate a check payment than an electronic payment.
The transaction processing costs associated with paper checks are more than 30 times as much as those for electronic payments, warns the National Automated Clearing House Association. It is not uncommon for businesses to spend $8 or more to print and mail a single check payment to a supplier.
But sky-high operational costs are just the tip of the iceberg when it comes to the cost of paying suppliers with paper checks. Paper checks also can be a major obstacle to growing your business.
Grow your Business with AP Payments-as-a-Service
Businesses of all sizes are ready to grow again.
Business growth is the top priority of treasurers and a top priority of CFOs.
But the way a company’s accounts payable department pays its suppliers can make it harder for the company to achieve business growth and success. Fortunately, AP Payments-as-a-Service eliminates the hidden costs of traditional supplier payments, freeing up cash that can help a business grow.
Here’s how AP Payments-as-a-Service helps businesses grow:
Improved operational efficiency
CFOs want their finance staff focused on growth-generating activities such as analyzing invoice data, collaborating with stakeholders, and building relationships with strategic suppliers. But the time that staff wastes keying invoice data, shuffling invoices and checks, fixing errors and mistakes, chasing down information, and responding to inquiries about payment status leaves little time for much else.
In a traditional check payments environment, staff must print checks, chase down approvals, generate remittance details, label envelopes and drop them off at the post office, deal with inevitable inquiries from suppliers regarding payment status, and manually reconcile bank statements. Sixty-three percent of businesses cite the operational costs around the reconciliation of invoices and payments as a major pain point, per the Institute of Finance and Management (IOFM). Manual payments processes are so onerous that most businesses must add staff as their payments volume increases.
AP Payments-as-a-Service makes it easy for staff to pay suppliers in their preferred method.
More opportunities to capture early payment discounts
Eighty percent of suppliers are willing to exchange discounts on the amount due on an invoice in exchange for early payment, IOFM reports. The earlier the payment, the larger the discount can be.
Unfortunately, it takes so long for accounts payable departments that operate in a manual environment to pay suppliers that discounts for early payment are out-of-reach. Whether it’s opening mail, keying invoice data, shuffling invoices to approvers, tracking down lost or misfiled invoices, or printing and mailing checks, every step in a traditional supplier payments process takes too long.
Slow supplier payments processes are forcing businesses to leave a lot of money on the table.
With the average discount that suppliers offer for early payment standing at 2 percent, the cash that can be generated through early payment discounts can add up fast. That’s money that a high-velocity business could be reinvesting in growth-generating initiatives such as research and development.
The faster cycle times provided by AP Payments-as-a-Service helps ensure that buyers don’t miss out on opportunities to capture early payment discounts. And the supply chain financing option in some AP Payments-as-a-Service solutions enables early payment without a buyer using their own cash.
Enhanced cash flow visibility
Decision-makers in fast-growing businesses need timely access to cash flow information.
But in a manual supplier payments environment, key information is not captured, systems are fragmented, information is not timely, and decision-makers do not have access to key variables.
And a buyer can never be sure when a check will clear its bank account.
Things aren’t much better for suppliers. Paper processes provide no visibility into where an approved payment stands in the process. Mail delivery is notoriously slow, and checks can become lost or stolen. And suppliers must manually deposit checks into their bank account. Against this backdrop, it’s no surprise that suppliers call and e-mail buyers about the status of payments.
AP Payments-as-a-Service puts smart insights into payments at the fingertips of those who need them. Finance staff can instantly see the status of payments and historical payment trends. And suppliers can count on electronic payments arriving in their account when a buyer says they will.
Cash-back rewards on card spend
Paying suppliers with paper checks offers no opportunities to earn cash-back rewards or rebates.
But most credit cards offer businesses cash-back rebates on their spending. Many businesses are racking up big rewards for large and small payments to suppliers. In some cases, the cash-back rewards earned by businesses have transformed their accounts payable department a profit center.
AP Payments-as-a-Service provide spend analysis services and integrated payments capabilities that help buyers maximize their cash-back rewards, freeing up cash that can be reinvested in the business.
Paper checks cost more than most businesses think. Businesses that pay suppliers with paper checks rather than AP Payments-as-a-Service miss out on benefits that can drive business growth and success.
Break free from checks and manual processes that prevent your business from growing. Contact us or book a meeting to get started!
How AP Payments-as-a-Service Drives Business Growth
As economies slowly reopen, businesses of all sizes are ready to grow again.
And CFOs are leading the way, spending more time finding and funding new sources of value and migrating finance from a tactical to a strategic function that can support business growth.
CFOs are discovering that accounts payable can play a big role in driving business growth.
Rethinking the way that the business pays its suppliers can free up cash that be reinvested in growth-generating initiatives such as research and development, new facilities, and global expansion.
That’s why more businesses are deploying AP Payments-as-a-Service.
AP Payments-as-a-Service makes it easy for businesses of all sizes to pay their suppliers in their preferred method. Buyers enter payments into their accounting system just like now, but instead of selecting “Print,” the buyer selects “Pay.” Payments are debited from the buyer’s bank account to a trust account for secure funding and verified funds and remittances are disbursed to suppliers.
Free Up Cash with AP Payments-as-a-Service
AP Payments-as-a-Service can be a powerful tool in freeing up cash. Here’s how:
· Reduced operational costs. Paper checks cost 30 times as much as electronic payments, studies show. Paper checks require staff to print, sign and mail paper checks, replace lost checks, respond to supplier inquiries, reconcile payments and invoices, and add staff as volume increases. Checks also are responsible for more fraud losses than electronic payments. The money by migrating from paper checks to electronic payments can be reinvested in projects that yield long-term growth, such as purchasing inventory.
· Extended Day’s Payable Outstanding (DPO). Paying suppliers via certain card programs enables CFOs to instantly gain new cash flow without requiring any changes to a supplier’s existing payment terms. Since the funding for the card program is provided by the buyer’s bank, and the payback period only kicks in once the payment is initiated, businesses can gain 30 days of new cash flow by using a card to pay suppliers. Extending DPO provides growth-minded CFOs with the cash their business needs to pay down corporate debt, make capital investments, increase research and development, or support other growth initiatives.
· More opportunities to capture early payment discounts. The faster cycle times facilitated by AP Payments-as-a-Service makes it easier for buyers to capture early payment discount offers from suppliers. Capturing more early payment discounts provides CFOs with risk-free returns on the business’ cash. Businesses achieve an average 2 percent return on the invoice due amount on payments made early, per the Institute of Finance and Management (IOFM). But many organizations in industries such as biotechnology, pharmaceuticals, consumer packaged goods, high tech consulting earn even higher early-payment discounts, IOFM finds.
· Supply chain financing. It doesn’t always make sense for a business to use cash from its balance sheet to pay suppliers early. That’s why some AP Payments-as-a-Service providers offer supply chain financing. The technology identifies early payment discount offers that aren’t be captured, funds the early payment in exchange for the discount offered by the supplier, and accepts payment from the buyer at term. The buyer gets to share in the discount earned by the AP Payments-as-a-Service provider, without paying the supplier early. Buyers can reinvest the revenue share earned through supply chain financing into their business.
· Cash flow analytics. AP Payments-as-a-Service provides CFOs with real-time visibility into critical working capital and spending metrics such as accruals, spending per supplier, department spending, DPO, late-payment penalties, percentage of early-payment discounts captured, percentage of payments made electronically, cost per payment processed and more. These types of metrics help CFOs manage and forecast their company’s cash flow.
· More time for growth-generating activities. The efficiencies provided by Payments-as-a-Service frees AP and finance staff to focus more on growth-generating activities such as analyzing data, collaborating with stakeholders, and building relationships with strategic suppliers. Staff no longer are burdened by transaction processing tasks such as printing and mailing checks, fielding supplier inquiries, and reconciling multiple bank statements.
Cash management is essential to business growth. That’s why businesses want their CFO to break out of their traditional role as a financial scorekeeper and uncover opportunities for growth.
AP Payments-as-a-Service provides CFOs with a valuable tool for driving business growth.
Contact us or book a meeting for a free consultation!
The Ghosts of Payments Past are No Match for the Killer Robots of the Future
The final week of cybersecurity month is upon us, and since it’s also Halloween, we’re looking into our crystal ball to assess the role of artificial intelligence technology in accounts payable and ask, will AI assist us in the fight against payments fraud? Or, as in (nearly) every episode of Black Mirror, will it turn into a monster of our own making?
We have seen how quickly AI has advanced in certain sectors. Autonomous weaponry is already in our near-term future. Not only are these killer robots intelligent, precise, fast, and cheap, but they can also learn — like how to form swarm attacks using teamwork and redundancy, making their missions virtually unstoppable. Scary, right? Imagine savvy fraudsters using this learning to execute cyber-attacks. With AI adapting itself to each specific target, this could mean even more personalized and convincing phishing emails, or more selective theft — the stealthy targeting of a specific file from a specific computer, rather than a large-scale attack that would attract attention.
Most organizations have historically relied on pre-defined data sets to spot threats. While this is certainly useful and does mitigate risk, human security teams typically do not have sufficient time to respond to an AI-powered attack before considerable damage has already been done. As these attacks become more frequent, businesses will increasingly depend on generating their own automated, machine-speed response that can act fast when the threat is detected. According to a recent McKinsey report, “AI will become increasingly indispensable to manage cyber threats, with the market expected to grow at a Compound Annual Growth Rate (CAGR) of 23.6% from 2020 to 2027 and to reach $46.3 billion by 2027. At the same time, the adoption of AI is not without risks in itself: more than 60% of companies adopting AI recognize cybersecurity risks generated by AI as the most relevant ones.” (“Artificial Intelligence and cybersecurity — CEPS”)
In other words, you can’t bring a human to a machine fight.
Or can you?
AI in Accounts Payable
Consider accounts payable fraud: It’s typically attempted in the form of fake invoices being sent for payment. AI can fight this by analyzing patterns in invoices, then detecting and flagging any anomalies. With the ability to gain a deep understanding of the company it protects — by learning normal and abnormal behavior for each individual user, AI can detect and halt brand-new cyberattacks.
Yet as AI technology develops in this space, security minded FinTech’s like Finexio are keeping a close eye on the new benefits it can bring to the table, but are wary of its downside as well, which can be summed up in the adage, “Information in, information out.” That is, humans still must program computers to ask the right questions. Finexio CEO & Founder Ernest Rolfson stresses the importance of personal service in the payments industry. “Change is inevitable and welcome, but the challenge is to speed up the AI process, making it more dependable and user-friendly. It’s best to ensure this technology is developed responsibly, with a macro view on how it can be used for or against an organization.”
Digitization already brings multiple benefits to accounts payable, including faster payment cycles & increased focus on more value-added activities, improved forecasting capabilities, reduced errors and cost-savings associated with the elimination of manual, paper-based processes. Overall, the key to AI use in AP security seems to be responsible implementation with human oversight. Computers are efficient, but not infallible, and human control is essential. “AI systems, unlike brains, are designed. Therefore, all the decisions upon which the systems are designed should be auditable.” (“Artificial Intelligence and cybersecurity — CEPS”)
In short, AI is “the shield and the sword”, a monster that can be used for good or evil, its purpose entirely defined by the entity that wields it. It will become increasingly important for businesses to modernize financial processes by partnering with companies that can responsibly integrate AI into their solutions, allowing businesses to reap the security benefits and simultaneously combat those using it for fraudulent purposes.
Learn more about how FinTechs like Finexio use and assess cutting edge technology to keep your payments safe. Contact us or book a meeting with one of our experts!
Sources:
https://www.ceps.eu/artificial-intelligence-and-cybersecurity/
https://www.wired.com/wiredinsider/2019/10/how-ai-battles-security-threats-without-humans/
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