Research from McKinsey and Bain shows that the embedded finance market is expected to double in size to $51 billion by 2026, the biggest potential market being B2B payments, which is estimated to reach $33.3 trillion in size by 2026. Next up is embedded finance, which we’ve highlighted as a major trend for this year on our blog. Small businesses that want to stay competitive should start looking into ways that AI tools could potentially aid their operations in the future. The conversation (and controversy) around the technology is mostly focused on the potential impact on the job force, but what can AI mean for finance? Data from payment service provider PayU indicates that almost 70% of fintechs will be impacted by the technology in the next ten years, with use cases including helping lenders make loan decisions, aiding businesses to better detect and avoid fraud, and improving back-office operations. Generative AI chatbot ChatGPT has played an especially central role in bringing the AI topic to the fore. Let’s start by looking at the technology seizing everyone’s attention most at this moment: AI. And those investments are paying dividends, with at least 3 in 5 CFOs saying that they have seen improved business operations thanks to the tools. According to a PYMNTS and Corcentric survey of 500 CFOs across industries, over 90% of those surveyed expect a global recession within the next year, which is triggering investments in their digital payments infrastructure. With increasing anxiety about the future economy, companies are turning to fintech to increase the odds for their business success. In this week’s report, the BlueX research team examines how finance innovation is becoming a priority for businesses in 2023, and what kinds of technologies are getting the most traction. #supplychain #paylater #cashflow #smesupport #fintech Visit our website to learn how BlueX Pay-it-Later can help you amplify your cash flow. Some methods we at BlueX suggest include trade financing (such as BlueX Pay-it-Later) and accounts receivable factoring. Last is to have a contingency plan with alternative methods of financing to stay cash flow positive during a banking-triggered crisis. Next, in an interview with TIME, an assistant professor of finance at the Yale School of Management, Song Ma, encourages small businesses to monitor cash flow performance closely, which can be accomplished using financial software. Our research team has identified three areas in which companies can take action during these kinds of events:įirst, the experts agree on the importance of businesses diversifying their accounts and banking with at least two to three banks to mitigate the risk of bank failures. Taneja also states that there is a “deep trickle-down effect” to main street businesses that might face payments from SVB customers now on hold, even though they may have never heard of SVB.ĭespite President Biden’s assurances that small businesses would bear no impact from the SVB collapse, it is always wise to remain prepared for financial uncertainties. So how will this affect main street? In a TIME interview with CEO and managing director at venture capital firm General Catalyst, Hemant Taneja, Taneja highlights the impact on payroll for both companies who bank at SVB, and for those who rely on their payment services for operational survival – including payroll, utilities, and vendor payments. Fast forward to earlier this month, the bank faced a massive $42 billion in deposit withdrawal requests that it could not cover, prompting the Federal Deposit Insurance Corp (FDIC) to step in and close it. These moves spooked customers, leading to a classic – though tech-accelerated – bank run, as VCs advised startups to pull funds from SVB. Unfortunately, SVB’s tech customers were now ailing, leading to withdrawals and deposits being drawn down, which SVB tried to cover by selling these assets at a loss and by an equity raise. When interest rates surged, the value of these assets plummeted, leading to potential losses of $17 billion by the end of 2023. In simple terms, SVB – flush with tech customer deposits during recent boom times – invested heavily in US government bonds that seemed safe, but were unhedged. Let’s start by looking at what exactly happened. In this week’s report, the BlueX research team takes a look at the collapse of Silicon Valley Bank (SVB), and the potential impact on U.S.
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