World over, there’s been much discussion about the impact the pandemic has had on business operations. This is particularly true when examining how finance and treasury professionals responded during this disruption and the possible long-term effects it will have on companies. It’s no surprise that this topic was a significant focus of the 2021 Business Payments Barometer survey.

Conducted by Bottomline, and now in its 6th consecutive year, the report surveys hundreds of financial decision-makers across Great Britain to gauge their understanding of the latest industry initiatives, gain insight into the efficiency of payments processes and discover the measures taken to protect against financial fraud over the next 12 months.

Drivers of change

Year on year, one consistent feature of the survey focuses on reviewing the current drivers of change in payments, asking respondents to share how those drivers might impact their business. Predictably, the global business disruption caused by COVID-19 topped the list as the most dominant and a largely negative influence on organisations. Conversely, the upside is that the pandemic has also propelled companies into making a more aggressive shift toward digitising their business payments.  

It stands to reason that easier access to cloud-based technology solutions should surface as the second biggest influencer, alongside mobile payments technologies to round out the top three.

SaaS and cloud to the rescue

Against this backdrop, respondents acknowledged that easier access to cloud-based payment technology is anticipated to be a deciding factor in payments innovation over the next year. Cloud-based solutions come with many benefits for businesses, from efficiency gains and increased accuracy to reduced costs and fewer IT resources. Such technology also boasts enhanced reporting capabilities and advanced data analytics – leading finance teams to better decision-making and improved cash flow (but more on that later).

Despite these plentiful benefits, the Barometer revealed an interesting ‘disconnect’ between recognising the need for cloud-based technology versus actually migrating to the cloud. To this point, the report reveals that only 8% of organisations surveyed plan to prioritise cloud technology over the next 12 months. Given the drive for digitisation, this suggests that many companies may prefer hybrid models or have deprioritised a migration to the cloud due to more pressing priorities.  It also begs whether companies who push their payments through internet banking applications or outsourced payment service providers consider such activity as ‘cloud processing’. Understandably, the digital transformation of business processes can be a complex and costly endeavour, contributing to the lingering uncertainty about moving to the cloud.

Going mobile

Once again, mobile payment technology dominates as a top driver of change as it has done for the past 3 years. It’s likely that tech-savvy consumers increasingly demand the same accessibility to mobile business payments that they enjoy for their personal financial transactions. Moreover, the recent push towards mobile payments may be explained by the fact that nearly 50% of organisations started accepting new forms of payments in 2020, of which 30% added mobile payments capabilities. During a time of remoteness, when the ability to receive contactless, non-cash transactions became necessary for business continuation, adopting mobile payment technology was a logical next step. As organisations experience the speed and ease of that payment platform, the transition to an increasingly cashless society seems imminent.

Better cash management

Perhaps the most universal payments theme to come out of the past year is that steady, reliable cash flow and sound liquidity are fundamental to business survival and potential growth, especially amid disruption. The widespread impact that the pandemic had on business operations and liquidity has levelled the playing field for organisations of all sizes. As the usual methods for collecting payments were interrupted and supply chains stumbled, access to cash and accurate cash forecasting became crucial. However, the Barometer sheds a different light on this, claiming that 48% of survey respondents agreed their forecasts are seldom accurate. When innovative technology is available to help companies master their receivables, payables and cash management, there’s little excuse for inaccurate forecasting.

As we move beyond the immediate urgency of ‘staying afloat’ and into recovery, it will be necessary for businesses to maintain focus on the fundamental building blocks – including exploring new and business-beneficial payment initiatives like Request to Pay and Confirmation of Payee. Powered by Open Banking, these new services aim to help companies develop end-to-end payments strategies and position them for success.

For more insights into Bottomline’s 2021 Payments Barometer, including expanded results on the importance of cash management, preventing fraud and financial crime, and exploring what’s driving payments innovation, download the full report here.

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Posted by Paul Fannon

As Managing Director, Global Business Solutions, Paul leads customers, partners and teams to stay ahead, stay protected and find more value across the global landscape of banking, payments and financial crime as it evolves. Whether that’s helping customers activate the shift from software to cloud, interpret changing international regulations, simplify cross-border complexity or win the fight on fraud, Paul champions the charge for customers across international markets. He is a strong advocate for the development and growth of team members in delivering customer delight on the journey. Paul has over 25 years of experience in payments, financial technology and international go-to-market strategy.