5 Business Banking Trends to Watch in 2023

The digital banking landscape is in a constant state of change. As we enter the new year, financial institutions (FIs) are preparing for a range of anticipated changes and trends that will impact the way they operate. Here are five key trends worth noting in the business banking world in 2023:

1. Increased adoption of digital payments for B2B transactions

The gap between paper checks and ACH credits is widening, and businesses are starting to see the value in reducing float time (the time it takes for a payment to clear) and negotiating better payment terms by paying vendors via ACH credit. B2B digital payments trends are being driven by a variety of factors, including the pandemic, which has accelerated the shift towards digital payments, and the rise of international payments systems like ISO 2022 and FedNow.

2. Impact of rising interest rates on banking operations

After a long period of low rates, FIs are evaluating how rising rates will affect their operations. For example, tools like controlled disbursements and sweeps, which were not viable in a low-rate environment, may once again become useful. Additionally, the trend towards buy now, pay later financing options may change as the cost of borrowing increases.

3. Automation and digitization of financial services for business continuity

FIs continue to focus on reducing float time to improve cash flow and reduce risk. This could involve using digital payments, implementing automation and virtualization, or adopting new technologies like blockchain, digital account opening, or e-invoicing. 

4. Treasury optimization

Since the pandemic, treasury optimization has become increasingly important for FIs. This includes enhancing liquidity management, digitization of treasury for future proofing, and optimizing operational processes.

Looking for ways to optimize your treasury processes? Find our expanded look at these trends in The Financial Brand Insights Magazine – Spring 2023 Edition. 

5. Embedded banking

The trend of technology and fintech companies integrating financial services into their platforms, creating a seamless “super app” experience for users. This trend reflects the blurring of lines between the tech and finance industries, with financial services becoming more integrated into other areas of business.

One example of embedded banking is the integration of buy now, pay later options into checkout screens for e-commerce websites. In the business banking world, this trend can be used to bridge liquidity gaps, allowing businesses to take advantage of earning assets while they wait to pay suppliers or receive payment from customers. However, it’s important for businesses to carefully consider the terms and fees associated with these types of financing options, as they may not be as favorable as traditional supply chain finance options. 

Overall, embedded banking is a trend to watch in the coming year, as it has the potential to significantly impact the way businesses handle their financial operations.

Conclusion

Alkami enables banks and credit unions to stay ahead of the game in an evolving digital environment and are well-positioned to help FIs take advantage of these trends and focus on shaping the future of digital commercial banking. Our expertise in the area of B2B payments makes us a valuable partner for FIs and businesses looking to navigate the rapidly changing landscape of digital payments, reduce float time, and streamline their operations. Alkami can also help with enhancing liquidity management for treasury departments, future proofing via our digital banking solution, as well as automating and improving cash flow and cash positioning wherever possible in operational processes.

Looking for 2024’s Business & Commercial Banking Trends? Click here.