Small businesses have learned a lot about flexibility while demonstrating remarkable resilience and entrepreneurship. Moving forward they‘ll use these lessons as the foundation of a more stable business environment that lets them grow amid ongoing change and uncertainty.
It’s clear that companies will need to continue to evolve. Based on our work with thousands of small businesses, and based on these relationships, insight into their payment behavior and a number of inspiring conversations, there are several trends that I believe will shape the next year.
Intelligent, context-specific advice and prompts will permeate financial offerings. Managing cash flow and credit became the difference between survival and failure, and unfortunately many businesses found that they lacked the expertise or tools to handle this effectively.
Solutions that use AI to simplify payments and cash flow management will become the norm. These smart products can now recommend the best way (ACH, credit, cash) for transactions to flow as well as the best time for a business to make a payment based on specific situations. This is an important tool for smaller companies who do not have cash management expertise. Keeping a close eye on cash flow continues to be a key element of success.
Also, more businesses will rely on fintechs for a wider range of services. While no fintech company has fully replaced banks as a trusted, secure place to store money, they have freed businesses from having to use their bank for everything financial. The increased credibility and awareness of fintech solutions has helped businesses become more comfortable using them for everything from making and processing payments to accounting or securing loans.
Fintech will be key in helping businesses bounce back this year. Many industries, from hospitality and restaurants to e-commerce and retail, took massive hits during the pandemic and resulting recession. Coming back will require agility, and fintech can provide the speed, agility, and scale that can be hard for smaller businesses to find in more traditional financial partners. As things become more normal, relying on fintech solutions will help these businesses get back on track more quickly. It also lets them become more consistent with their capital management and payments so they can grow faster and access more working capital.
We expect good things from 2021. At the end of the year, when we look back, I think this will be a pivotal year for business and our economy—an exciting time when they were able to streamline, simplify and define their own new normal for the long run.
