Four ways fintech is redefining B2B relationships

By Tim Pickard | 14 June 2017

B2B relationships are key to the success of most businesses. However, maintaining effective value exchanges with other businesses isn’t always easy. From tight delivery schedules and multi-channel conflicts to payment collection, the challenges can soon mount up. Thankfully, by providing the tools to capture and process financial data in real-time, fintech is helping companies to change the way they do business for the better.

Making global relationships easier to manage

In today’s globalised marketplace, access to cross border payment systems is crucial. Until recently, businesses had little choice but to rely on banks to facilitate this need. In the worst cases, bank-managed cross border payments can take months while incurring substantial charges along the way.

Using the traditional banking model, processing cross-border payments is more expensive because it involves multiple banks that each take a fee or percentage. What’s more, as money passes through these banks, it’s not unusual for critical payment data to get lost, leading to a lack of visibility on payment status.

Cross border payment fintech solutions cut the banking middle men out, while providing transparent, convenient and cost-efficient payment solutions. In doing so, they allow businesses to finance imports, accept payments from overseas customers and, crucially, manage exposure to foreign exchange much more easily.

Simplifying supply chain management

The fintech firm Ormsby Street analysed ONS data to reveal that four in ten companies don’t make it past five years in business. It discovered that the biggest contributing factor to start-ups failing was cash flow problems made worse by late payment of invoices.

Late payments create a domino effect that forces suppliers to put up prices, which of course puts a strain on buyer relationships and causes a loss of trust. Fintech solutions are helping to reduce this business killer through payment technologies that allow suppliers and buyers to collaborate more effectively.

For example, a recent HBR article revealed how fintech solutions can now operate as cloud-based software platforms that enable ‘procure-to-pay’ systems. In short, these integrated systems ‘close the loop’ between purchasing management and accounts payable, thereby improving trading partner relationships by increasing visibility and reducing late payments.

Providing alternative lending models

Everybody knows that lending from mainstream banks to small and medium-sized businesses shrank significantly post-2008. What fewer people realise is that the number of UK firms suffering financial distress is continuing to rise. One of the key reasons that many businesses still struggle is chronic underfunding.

Fintech companies are in the process of reshaping the lending economy by providing alternative financing options that are changing the way businesses generate capital. By enabling end to end, digitally managed solutions, the fintech lending sector allows businesses to access fast and efficient lending options at a lower cost than previously possible.

Crowdcube is arguably the UK’s most successful online crowdfunding platform. The company’s mission is to ‘make investment easy and rewarding for anyone, anywhere’. To date, the project has been hugely successful, raising money for over 400 start-ups (39 of which were over £1m) across a wide range of sectors, including tech, food and drink, and retail.

Making business advice open to more businesses at a lower cost

Fintech companies are now able to offer services that were previously not available to small and medium-sized businesses. Always-on internet connections and big data analytics means businesses can now invest in fintech platforms providing functions that would have cost millions to implement just a few years ago.

Feature-rich fintech software gives businesses real-time access to financial information at an unprecedented level. For switched on business leaders, this equates to incomparable insights that can deliver favourable conditions for forging B2B relationships.

DueDil is a fintech solution designed to deliver business information and intelligence. Dubbed ‘Britain’s answer to Bloomberg’, the platform pulls data from thousands of online sources, enabling businesses to find opportunities and mitigate risks. At the time of writing, Royal Mail, Dell and UNICEF are just a small selection of the companies that have turned to DueDil for its due diligence, research and lead generation capabilities.

So, in light of big business taking up fintech to ease the stresses and strains of traditional finance models, it’s time for smaller businesses to take the plunge. How could fintech affect your plans for expansion? Could fintech save your business money and improve operating efficiency?


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