Business Banking Trends to Watch in 2023 By Mandy Lopez Product Manager at Alkami
The digital banking landscape is constantly evolving, driven by rapid technological change and shifting customer expectations. Five trends financial institutions (FIs) should pay attention to right now include digital payments, rising interest rates, a focus on business continuity, treasury optimization and embedded banking. Plus, they need to understand the implications of the transition away from Libor
The digital banking landscape is in a constant state of change. FIs are preparing for a range of anticipated changes and trends that will impact the way they operate. Here are five key trends worth noting in the business banking world in 2023: TREND 1
TREND 2 Impact of Rising Interest Rates on Banking Operations After a long period of low rates, FIs are evaluating how rising rates will affect their operations. For example, tools like controlled disbursements and sweeps, which were not viable in a low-rate environment, may once again become useful. Additionally, the trend towards buy now, pay later financing options may change as the cost of borrowing increases.
Increased Adoption of Digital Payments for B2B Transactions
The gap between paper checks and ACH credits is widening, and businesses are starting to see the value in reducing float time (the time it takes for a payment to clear) and negotiating better payment terms by paying vendors via ACH credit. This trend is being driven by a variety of factors, including the pandemic, which has accelerated the shift towards digital payments, and the rise of international payments systems like ISO 2022 and FedNow. In addition to supporting faster payment settling and negotiating better terms, this trend is part of an overall move toward improving cash management. This is one area where the U.S. financial system is catching up with much of the rest of the world. Checks are not as widely used internationally. So this is a prime example of how rapid technology advances and, unfortunately, Covid-19, have brought global finance systems into closer alignment.
Tools like controlled disbursements and sweeps, which were not viable in a low-rate environment, may once again become useful .
TREND 3 Automation and Digitization of Financial Services for Business Continuity FIs continue to focus on reducing float time to improve cash flow and reduce risk. This could involve using digital payments, implementing automation and virtualization, or adopting new technologies like blockchain, digital account opening, or e-invoicing. During the Great Resignation, an increasing number of companies across all sectors faced sig- nificant business continuity issues. Without detailed
Businesses are starting to see the value in reducing float time and negotiating better payment terms by paying vendors via ACH credit.
4 THE FINANCIAL BRAND INSIGHTS SPRING 2023
THE FINANCIAL BRAND INSIGHTS SPRING 2023
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