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As more organizations migrate to an online business model, their needs from FinTechs and other third-partyserviceproviders are in flux. This week’s B2B Venture Capital roundup reflects those changing needs, with B2B fraud mitigation efforts for online businesses emerging as the funding leader.
Paper checks are gradually shrinking their market share in the B2B payments landscape, yet the outdated payment tool remains in-use for up to 80 percent of businesses in the U.S., The other strategy is to migrate to another payment rail, likely Automated Clearing House (ACH), which is quickly climbing the B2B payment ranks.
There is an array of benefits to wielding multiple cloud serviceproviders, he said. It mitigates against the risk of a loss of service or vendor lock-in because if one service goes down, others are likely still running. Choosing the right third-partyserviceproviders can be tactical.
” Financial institutions today are also struggling to connect the dots between all of the ways they use data analytics to mitigate risk and add value to their lending operations, added Horrocks. He offered the example of banks using analysis of financial statements to assess risk in the loan origination process. . ”
This creates an interesting predicament for B2B payments disruptors: Should technology be used to make paper checks less friction-filled, or should it be used to entice businesses away from the paper check altogether? Chanda explained Paymerang’s role is to handle that extra work for clients, including risk mitigation and data digitization.
Prophix is another company that recently rolled out its own addition to the B2B virtual assistant space, having launched its Virtual Financial Analyst for middle-market finance departments. But Ajmera said B2C and B2B data privacy challenges cannot necessarily be compared. “In in particular.
percent of survey respondents reporting that they are “very” or “extremely” satisfied with paper checks, it seems like B2B payers really don’t find them to be all that bad. Clark emphasized the importance of third-partyserviceproviders delivering a clearer message to accounts payable departments.
Mitigating Risk For ThirdParties. Supply chain verification is instrumental in mitigating the risk of noncompliance for marijuana firms regulated at the state level. ” Today, the financial industry continues to explore ways to provide legal services to marijuana businesses.
Many banks have increasingly leveraged and become dependent on third-partyserviceproviders to support key operations within their banks,” the report stated. Over time, consolidation among serviceproviders has resulted in large numbers of banks reliant on a small number of serviceproviders.”.
Risk management Financial institutions and third-partyserviceproviders must construct and execute a risk-based approach to detect and prevent fraudulent ACH transactions. This includes developing policies and tools to adequately identify, assess, and mitigate potential fraud.
Further, the financial risks of this challenge expand into areas like payments fraud and cyberattacks, with Lutz pointing to the growing sophistication of such crimes, and the increasing complexity of identifying them and mitigating these risks.
But SMB loan underwriting at traditional FIs has, for the most part, remained unchanged, even as alternative lenders began exploring the role of alternative data in the risk mitigation process. The issue at hand, however, is that Facebook stats are hardly reliable to traditional lenders mitigating the risk of small business borrowers.
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