What Do Financial Firms Know About Digital Payments That You Don’t?
There’s no denying that cash is no longer king. The pandemic fast-tracked the need for digital payments processing, and many businesses have turned their focus to fintech. According to Business Payments Digitization: A Path to a Better Balance Sheet, a survey conducted by Corcentric and PYMNTS.com, 71 percent of CFOs have increased their use of digital payments since the pandemic’s onset. If you break that down by industry, financial firms take the cake in terms of recognizing the positive impact payments digitization can have. What are they seeing that other industries aren’t? Let’s explore.
Cashless is Key
CFOs at financial institutions have prioritized going cashless and implementing payments platforms better than most. Seventy-one percent of them say that digitization is “very” or “extremely” important to improving balance sheets, more than any other sector in the survey. On the other end of the spectrum are industrial and manufacturing firms, with just 45 percent of CFOs seeing digitization as key to their fiscal well-being.
The fact that financial firms are leading the pack when it comes to accelerating financial technology speaks to their recognition of the attainable and measurable results associated with going digital. When asked why they sped up payments digitization, about 48 percent of CFOs at financial firms said, “to improve their balance sheets.” In other words, these firms realize that payments digitization ultimately leads to financial improvements in cash flow and working capital.
The view that financial institutions have of payments digitization – that it can lead to better financial outcomes and more efficient business operations – is not baseless. In fact, 87 percent of firms in the financial services sector say that digital payments have helped improve their working capital. They are also more likely than firms in other areas to say that digitization has enhanced their payments’ data security and helped with fraud reduction.
Adapting to Change
In the wake of the pandemic and changes in the global economy, financial firms have clearly increased their focus and spend on new technology (and are reaping the benefits). They were faced with unique challenges, such as meeting the demands of the more than five million U.S. businesses that received a PPP loan. These institutions were also affected by the growth of mobile payments and e-commerce (and decline of in-person transactions). They reacted to all of these shifts not by panicking, but by shifting themselves – to digital payments.
There’s a lot that can be learned from financial firms’ adoption of digital payments. Modernizing payment infrastructure has given them a competitive edge, frictionless transaction experience, speed and simplicity, and the agility to improve customer experience, all while remaining financially stable. Companies within the finance sector seized the moment, and others should follow suit.
Become a Digital Payment Drive
Of course it’s not just financial firms embracing electronic payments. Whether you’re a small business or a big one, you can benefit from enlisting a payments provider that offers the type of payment technology that eliminates manual tasks, reduces payment errors, saves time, and increases efficiencies.
Corcentric’s e-payment system digitally transfers payments to designated bank accounts, in real-time, and accommodates a variety of payment methods, including ACH, V-cards (virtual credit cards, including Mastercard and Visa), and checks, including the ability to provide payments in 18 countries and 140 currencies. Don’t get left behind in the digital transformation; start alleviating cash flow pressures and optimizing the payment process today.