There are a number of branches or sub-categories under the broad umbrella of artificial intelligence (AI), and at this time we are in the narrow AI stages of computer science in terms of execution for financial services and other industries. The narrow stage includes branches such as machine learning (ML), robotic process automation (RPA) and natural language processing (NLP). For a detailed discussion, our Emerging Technology members can reference a primer report that covers ML. The referenced article for this summary appears in Nasdaq and discusses AI as it is being adopted in B2B payments, which lags take up in consumer scenarios, as many readers may already know. The author’s perspective comes from the investment angle, where fintech has now been a darling for half a decade and counting.
‘The digital payments revolution is well underway, with new providers and innovations in business-to-consumer (B2C) and peer-to-peer (P2P) payments emerging constantly. However, there is one key area in which the level of change has not yet matched the other sectors: business-to-business (B2B) payments.’
As our readers know this is a major theme of ours in 2019 so we track developments in this space very closely as part of the commercial & enterprise payments service, with several research releases during the past six months dealing with different aspects of the cash cycle. Businesses have been able to access and take advantage of payments automation for many years, but adoption has been tepid for reasons ranging from lack of knowledge to inertia, but the slowest take up has been in the SME space, likely not surprising to many. This is changing with many product announcements and partnerships in the past two years targeting the SME space.
‘B2B payments often involve analog processes and outdated systems, and are a significant pain point for small and medium-sized businesses (SMBs), which are responsible for 80% of total spending on labor and processing in the US. SMBs spend approximately $2.7 trillion on accounts payable alone; however, new payment technology, most notably artificial intelligence (AI) and machine learning, have only just begun to eliminate the manual tasks, legacy systems, and other inefficiencies that plague B2B payment interactions. Here’s a look at some of the latest AI-driven trends changing the way SMBs handle B2B payments.’
There are more solutions now than ever before, with technology advancing computer processing speeds (chips) and integration capabilities (APIs), and if digital data capture is done correctly, allows for the ability to capitalize on AI branches across the cash cycle. The author discusses payables, but B2B payments involves lots of surrounding processes and systems on either side. So the author rightly points out that solutions for credit decisions, fraud management and receivables automation are all now providing forms of AI to enhance performance. Our members can do deeper dives on the various points made but it’s a good overview of what is happening.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group