FinTech has transformed the way modern businesses do business. The introduction of mobile lending and payments, transactional data analysis, and financial advice via digital channels have rewritten what banking looks like. Especially for small businesses, these changes created by FinTech have altered the financial landscape.
However, as impactful as FinTech has been, yet another revolution is happening that transforms the way businesses do their banking. As technology progresses and becomes even more interactive, businesses are expecting more and more from their partners in the financial industry. Instead of relying on banks simply for traditional financial transactions such as loans and deposits – while using other platforms to interact with customers, suppliers, and business partners – modern-day businesses prefer to have everything wrapped up into one platform.
Tapping into this need, many software providers who already supply businesses with services such as accounting or invoice processing have added financial services to the package. Now, business can conduct all their financial transaction at one spot. These embedded financial services come as part of a package of payment and accounting software instead of a standalone product and are becoming more and more popular as businesses realize the convenience and utility of this approach.
The challenge this poses for traditional players in the financial industry, is that they’ve missed this shift and are starting to be left behind. Many banks don’t have software on hand to integrate additional financial services into their online products. Instead, nimble startups that specialize in integrating multiple services into a single platform are gaining customers and earning profits from the services they’re offering to businesses.
A way forward for banks and other players in the financial industry is to forge partnerships with software companies. This way, it becomes much easier to provide a suite of financial services – from accounting to online payments – that creates a one stop shop for all financial needs. The bank can still offer their expertise and resources for traditional business banking processes such as lending and deposits, while still being able to compete with software applications that offer services such as online payments and integrated receivables.
There are several software businesses out there that are willing to partner with banks. These software platforms allow banks to plug into this existing market and bring what they have to offer into this new age of digitized payments.