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The end of the pandemic had businesses hoping for a few good years of growth. But with a recession just around the corner (the US has already experienced two consecutive quarters of GDP decline), business challenges won’t be slowing down. The Russia-Ukraine war and rising inflation rates are only going to add fuel to the fire as profits take a hit.
Businesses that embrace the latest technology trends in finance are more likely to be able to keep up with the growing financial pressures and maintain steady revenue and bottom-line growth. The effective use of technology in finance will help businesses optimize costs, collect revenue faster, and avoid making wrong investment choices.
Here are some of the top fintech trends that will reshape businesses in 2023.
Cryptocurrency and blockchain have surprised the world in the last 2 years. Their adoption rates have skyrocketed, and the total crypto transaction volume stood at $15.8 trillion in 2021, a jump of 567% since 2020. Crypto has the potential to transform the order-to-cash function and change how cross-border transactions work. For example, payments via crypto networks like Bitcoin do not have any intermediaries like banks and are almost instantaneous.
Then, we have the metaverse, which can play a significant role in enhancing customer experience. Customers can interact with products and services online, bridging the virtual and reality gap. Companies can also massively improve their after-sales service with the metaverse.
It can also simplify the O2C process. Let’s take the example of a major retail business like Walmart to understand this. Let’s say they want to order new stock of Coca-Cola. Instead of doing it the traditional way, they can check Cocacola’s warehouse virtually in the metaverse, and if there are ample stocks that meet their quality standards, they can place an order.
To become a growth-focused business, your systems and processes must be efficient. However, traditional accounts receivable and order-to-cash processes are manual, which reduces employee productivity and efficiency, and results in many errors. So, CFOs need to focus on automating their finance processes as soon as possible.
Moving away from traditional AR processes can help businesses reduce DSO by predicting when the customer is going to make a payment. It can also help identify at-risk customers, enabling proactive collections and reducing bad debt.
Automation can even help organizations manage hybrid and remote work more effectively with better decision-making, simpler workflows, and fewer errors. Therefore, companies can build connected systems with the main focus on high-value tasks where people and technology work in conjunction.
Artificial intelligence (AI) and machine learning (ML) have made their way to the fintech industry, and in the upcoming years, they will play a huge role in reshaping businesses. AI and ML can be used by businesses to improve their customer experience with the use of bots and virtual assistants. At the same time, they can be used to deploy algorithms that automate mundane tasks like bookkeeping.
Machine learning works on a lot of data to generate useful insights. For example, businesses can use ML to figure out an approximation of the bad debt they are likely to incur based on records from previous years. AI and ML also help in risk management, marketing, decision-making, and customer retention.
Security is also an area that machine learning and artificial intelligence help improve. It helps organizations keep user data safe by identifying potential breaches or suspicious activity well in advance. Many payment companies like Stripe and PayPal are investing in ML for this reason.
Cloud computing enables the delivery of different services and tools via the internet. These tools and programmes comprise software, servers, databases, networking, and data storage, among others.
Cloud-based storage enables businesses to store data on a remote database rather than some proprietary hard disc or local storage device.
By 2025, 87% of businesses intend to boost their migration to the cloud. According to a report in The New York Times, a few well-known banks, including Wells Fargo, Morgan Stanley, and Capital One, have already begun their transition to the cloud.
Using cloud computing has a lot of benefits, such as access to a wide variety of tools and technology, scaling up and down as per business needs, offering good customer experience and faster deployment of applications across different physical locations. It will enable finance professionals to track key metrics and access the dashboards from anywhere.
Use AI-based HighRadius’ Autonomous Receivables software for anomaly detection and save your teams from manual work during the month-end close.
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