Historically, traditional banks have utilized a payment process that is time-consuming and frustrating for both payers and payees because of the transfer time and potential human errors. Hang on to your hats, there are new players in town. Fintechs, neobanks, and B2B payments providers have been giving traditional Financial Institutions (FIs) a run for market share by offering more seamless approaches to payments. Case and point: Traditional payment methods are quickly being replaced by real-time digital payments, which are more secure and efficient. Digital payments are powered by financial Small and Medium Business (SMB) data – sourced from accounting, commerce/sales, banking, payroll, tax, and more.With this SMB data, B2B payment providers provide instant payments and business insights, helping detect fraud for the SMBs they serve. In this blog, we’ll dive into how financial data on SMBs will empower your organization, and enhance your overall customer experience and payment process.
Financial Data Accelerates Neobanks’ Payment Process
The B2B tribe has spoken and the demand for real-time payments is high. According to a 2021 report by PYMNTS, 30% to 50% of B2B payments will not only be done digitally but also in real-time. If you are a financial institution that does not adapt to this new market reality, you will lose market share. Payment providers are creating new payment channels instead of the time-consuming traditional way, where payments need to be processed in traditional rails. The industry has adapted so quickly that now payment providers are collaborating with data aggregators to enhance their product offerings. If a payment provider is offering the ability to send real-time business payments seamlessly, data aggregators offering access to SMBs’ financial data like accounting, commerce, banking, payroll, and tax data, businesses can make data-driven decisions and save on costs.
You might be wondering why this data is essential. Getting payments sent and received is part of the solution, offering insights to businesses and tracking those payments is the other part of the solution, and here’s where access to financial information in real-time gives payment providers a competitive edge in the market.
With access to financial data such as financial statements and sales/payment information, payment providers can suggest regular payments based on their business customers’ sales, accounts receivables, and accounts payables information. Generally, businesses are required to enter account and payment information. With real-time data, the information is automatically collected and presented to the business so that all they have to do is click ‘send this payment’. By incorporating data and automating the process, neobanks can now standardize the approval process, reducing human errors and streamlining costs.
Financial Data Enhances Neobanks’ Customer Experience and Decision-Making
The rise of eCommerce has further highlighted the need for personalized experiences, as reported in a PYMNTS and USEND collaboration. Financial data plays an extremely important role in this case for fintechs, FIs, and neobanks, as it provides a more complete picture of their business clients’ financial behaviors and payment activities, allowing them to adjust their product offerings and go-to-market tactics.
Implementing financial dashboards like Boss Insights’ CFO-in-a-box will help SMBs fully utilize their data assets. The platform will automatically collect client data from multiple sources and perform in-depth analysis and forecasts based on the financials. This analysis will be further used to guide product recommendations, helping neobanks achieve personalization.
By gaining a comprehensive understanding of customers’ preferences through SMB data, payment providers can narrow down messaging and provide data-backed product recommendations, satisfying clients’ needs by communicating new payment features like cross-broader and real-time payments, all before the SMB requests them.There’s a growing trend to empower SMBs to get access to products and serve themselves. It’s a win-win because it’s cost-effective for FIs and neobanks while giving SMBs real-time access to the product they need in a user-friendly way. CFO-in-a-box can also be used internally to guide decision-making. By calculating configurable ratios and scoring, neobanks can reveal their business health, and areas for process improvements to gain valuable industry insights. As digitalization becomes the future trend, SMB data is crucial in guiding future strategies and decisions. Businesses that utilize data will gain themselves a competitive advantage in the industry.
Financial Data Enables Neobanks to Detect Fraud
According to AFP, 78% of businesses experienced attempted or actual B2B payments fraud in 2020. With the increase in digitization, there’s going to be an increase in fraud. By having an integrated platform, neobanks can collect data from multiple sources and analyze it to detect potential fraud at an accelerated pace.
Here’s how access to financial data helps address fraud risk. With access to information from accounting, sales, banking, payroll, tax & more, it is now possible to have real-time access to verify the same data points across multiple sources. Verifying data across multiple sources mitigates this issue by detecting discrepancies. It’s not only possible to get access to banking statements, sales reports, and financial statements, but possible to set rules to identify when discrepancies exist to notify the payment providers. It’s also possible to configure systems to present alerts when the data sources do not match. When there is a discrepancy, the platform will send automated alerts immediately, allowing fraud to be identified and mitigated quickly.
Boss Insights’ Financial Data Empowers B2B Payments Providers With SMB Insights
It’s been said before and it’ll be said again – the pandemic has changed our way of doing business. Digital capability is table stakes and the industry is seeing so many new players in the B2B payments space.
There’s good news and there’s a call to action for B2B payment providers. The good news is that with more business registrations than ever before, there is a lot of business to be had. The challenge or call to action is that with so many service providers, SMB customers’ expectations are on the rise. Frustrating payment processes won’t be tolerated if the business has options for better alternatives.
Leading payment providers are using real-time financial data from their business customers to offer a more seamless experience. The stats provide strong evidence – 51% faster decisions, 100% automated scoring, and for the FIs and neobanks, 60% cost savings.
The future lies in businesses having a real-time understanding of their own business needs utilizing dashboards driven by their own financial data and analytics with product recommendations that they can customize to their needs. If you’d like to learn more, reach out for a quick demo: https://bit.ly/3brCg6r
How Boss Insights Can Help
Boss Insights is an award-winning global leader in open banking, linking fintech and financial institutions to their small and medium-sized business clients’ financial accounting, commerce/sales, banking, payroll, and tax data in minutes. In an industry that needs speed and access to real-time data, Boss Insights empowers fintech, private lenders, and financial institutions to serve their business customers. In addition to data from the likes of QuickBooks, Xero, Stripe, Square, Shopify, Amazon, and more, Boss Insights provides portals to originate, decision, and service fintechs and financial institutions. For more information, visit www.bossinsights.com