Key Trends Shaping Fintech Software Development for B2B Companies

Fintech is a seedbed for technology changes and re-orientation of our financial system. It can be seen by comparing fintech with its rates before the COVID-19 pandemic. In 2022, the number of fintech startups offering custom financial software services almost doubled the number that existed in 2019. This figure shows that the current economic recovery has positively demonstrated its resilience.

With the development of fintech, we began to see banking as a service. Online transactions have complemented the e-commerce sector. Next to them, lenders grew in strength. Execution of transactions via mobile devices and the transfer of the retail industry to the Internet since the pandemic has motivated the development of financial applications in terms of security, compliance, and privacy.

Currently, payment solutions focus on maximum flexibility. Deferred payments replace traditional loans, making purchases easier during challenging times of rising inflation. This is convenient for both customers and merchants who do not have to worry about transaction safety.

Open banking is a financial service in which banks provide third parties with information about their customers’ accounts. These data are transferred using the API. One of the Open Banking options is account aggregation, i.e., the ability to add bank accounts and debit cards from many banks to the electronic application of the primary bank. As a result, checking accounts is easier because users can view their finances in one place.

Data is everywhere these days. And companies of all sizes process vast amounts of them. In the past, businesses employed trained scientists and data analysts who turned information into analytics and insights that aided decision-making. Today, Artificial Intelligence (AI) and Machine Learning (ML) come to the rescue. Predictive analysis allows you to plan the company’s next moves faster and more accurately based on the results of previous decisions.

AI boldly entered every area of life and business, so the presence of this innovative technology in the finances was only a matter of time. Many B2B companies are using AI to improve financial solutions. Productivity in the company that uses AI is nearly half higher because it automates mundane and tedious tasks. Automating duties can reduce staffing costs, and people can move on to more essential and rewarding duties.

ML in Fintech B2B can be used to predict market risk, forecast financial trends, and more. ML’s capabilities allow you to limit fraud or control fraudulent transactions until someone decides on the next steps. Advanced reporting with ML allows for detailed insight into the collected and analyzed data. As a result, the company’s top management can quickly gain strategic insights into financial institutions and make critical decisions based on data analytics results.

Blockchain is a distributed network that records a variety of transactions quickly, transparently, and in a sustainable way. The means of exchange in Blockchain are cryptocurrencies such as Bitcoin. Blockchain prevents data from being modified, making it a legitimate disruption for the payment, cybersecurity, and healthcare industries.

Despite the popularity of cryptocurrencies, Blockchain technology is not as popular in fintech B2B as, for example, AI. That should change because the possibilities of Blockchain allow you to reduce delays of transactions and unnecessary costs.

As mentioned before, a desirable result of using Blockchain is the reduction of payment costs. Blockchain transactions are also less prone to errors and delays. Using public and private keys assigned to user accounts simplifies identification and minimizes identity theft risk. Thanks to meticulous verification, it is easier to perform transactions with merchants from around the world.

Robotic process automation (RPA) means using applications to automate repetitive tasks based on strict rules with cross-application programs. RPA speeds up the processing of repetitious operations. Also, RPA provides consistency and constant quality of the output. Unlike people who give an individual character to the content they create, RPA robots will always generate the same result, relying on rigidly established rules.

The implementation of RPA in fintech can result in a competitive advantage. All the tedious tasks that people currently perform can be handed over to machines that will do it much cheaper. People who have been wasting their potential so far can generate tons of new ideas that will change the direction of your business.

In cloud computing, tasks are performed on remote servers and computers. It enables access to the company’s resources from anywhere in the world with an Internet connection. In the financial world, cloud computing is a more moneywise alternative than on-premise implementations. In addition, cloud solutions make it easier to respond to the rapidly changing market and growing customer expectations.

It is worth paying attention to the fact that the implemented cloud solutions scale well. Scalability allows you to quickly expand the commerce infrastructure along with the growth of your business. Basing a fintech enterprise on easily scalable systems will keep its productivity high, even in a situation of much greater interest in business transactions.

Speaking of scalability, cloud services are much easier to expand than local infrastructure. Clouds are very flexible because, in the case of reduced needs, you can limit the use of cloud storage space. The whole process is also much cheaper than maintaining your servers and, at the same time, more efficient.

By storing data in the cloud, you have a guarantee of safety. No cloud service provider can afford to fail, so they invest in the best security. You can be sure that, even on a shared cloud, your data will be safer than on a server in the basement of your company’s headquarter.

Financial companies rely on services that focus on rapid growth to improve efficiency. The customers’ opinion is essential here, which motivates service providers to change quickly. The most success brings the implementation of products based on AI, blockchain, and data analysis, such as chatbots, digital assistants, or fast payments. The introduction of the above solutions increases the number of automated tasks in fintech B2B and frees up time that can be used to service more clients.

Embedded finance helps you deliver your products to customers at the right time and place to maximize their impact. With API integrations, you can merge their services with existing business systems to provide higher customer experience levels and build more valuable and devoted relationships.

Do you need to account for more intricate customer needs, changing systems, and heavy market pressures? Embedded finance allows you to build more precious relationships with clients. ERP and trade finance integration put your services at the heart of their businesses. If you want to provide more targeted products based on complete consumer data, you can retain business customers, deliver new products and grow market share among tech-first businesses.

APIs are versatile, fast, and secure ways for businesses to access banking products and services. The deployment of APIs for all available areas is growing. APIs are welcome from traditional business through embedded finance to the emerging playing fields of banking as a service and platform as a service. APIs are necessary for any future fintech architecture, but only with a clear strategy for maximizing their potential.

Financial Business Intelligence (BI) involves collecting, analyzing, and presenting financial data from many sources, including market data, accounting systems, and transaction records. BI in finance is used to support financial analysis and make precise decisions by management in large and small businesses. BI technology supports budget planning, forecasting trends, preparing financial statements, and monitoring results.

Real-time payment and instant settlement are systems that enable revenue streams without intermediaries. These technologies also ensure the finance transfer with no delays. Real-time payment and instant settlement solutions don’t rely on batch processing, settlement cycles, or clearing houses. Instead, they connect directly to the payer’s and receiver’s accounts using digital platforms such as mobile apps or APIs. Therefore the verification and execution of the transaction take place in real-time.

Real-time payment and instant settlement are game-changers in how businesses and consumers exchange money. These technologies enable faster, cheaper, and more practical transactions. Real-time payment and instant settlement also improve the cash flow. However, using them to perform business transactions also involves some challenges and risks in the fields of cybersecurity, interoperability, and compliance.

By using real-time payments and instant settlement, consumers can pay or receive money in any situation and through any device more flexibly. These technologies reduce or eliminate fees and commissions associated with traditional payment methods. Furthermore, real-time payments and instant settlement services minimize fraud, errors, or disputes exposure. The revenue is more visible and available because the transactions are immediately reflected in the account balances.

As you can see, plenty of fintech solutions on the market are changing the current approach to transactions. If you have already applied some of them in your business but feel that you would develop better with a dedicated solution, consider investing in some custom solutions for the fintech industry. Take advantage of the extensive experience of Scalo experts, who will design the perfect software for you to streamline your financial processes and manage your working capital.

What is the future of fintech in emerging markets? Areas where banking, especially e-banking, is not widely spread are great places to introduce intuitive solutions that will not generate high costs.

Mobile payments have a good chance of being enthusiastically received in developing markets. They omit access to traditional banking, guaranteeing the same services, such as credits, deposits, and insurance. The personalization of these services is enabled by AI and ML, which quickly analyze large data sets and, based on them, set trends for a specific market.

As in many industries, also fintech requires being up to date with technological innovations. Many banking processes do not exist without specific applications; others would now take much longer and consume significant amounts of money. If you need to find out if there are solutions that you should introduce to your business, contact Scalo. We will analyze the technologies you use daily and advise you on the trends that will allow you to serve other companies better.