What are the hottest fintech trends for 2017 and – more importantly for corporate treasurers and CFOs – how will these trends affect cash management and payments?

Research consultancy firm KAE has made some predictions on what it sees as the 'hottest FinTech trends in 2017'. Not all fintech trends will make themselves felt in corporate treasury but here are some to look out for in the payments and cash management space:

Blockchain technology

The development of blockchain is likely to focus on areas such as trade finance and cross-border payments, as well as digital/crypto currencies. KAE's Chris Holmes writes that developments in the crypto currency space “is likely to be consumer focused but we expect that this could well be rolled out into the B2B settlements space in the near future as trust, regulatory support and acceptance improves – we will be watching the developments in Japan very closely given the activity by MUFJ and Mizuho, alongside the Japanese Government’s recognition of digital currencies as real money.”

Digital, mobile payments

Digital payments – referring to in-app payments, NFC payments, mobile wallets or other mobile channels – are taking off and will continue to do so throughout 2017. Of NFC payments, KAE's Arnaud Le Saouter says: “Lack of clear customer benefits vs. traditional card payment remain the main hurdle to widespread adoption and usage.” This will mainly be an issue for retail corporates, who should be aware of the importance of offering omni-channel payment option to their customers.

Biometrics for authentication

Using facial, fingerprint or even vein recognition hasn't really hit the main stream for financial institutions when it comes to authentication but technology could use unique biometric identifiers to improve access security to corporate bank accounts or data. “The ability to increase payment security and reduce fraud will be very appealing in the corporate space,” says KAE's Shona Sabah.

Banking for SMEs

Products and services are being developed for small and medium-sized enterprises (SMEs), a large number of which have not yet adopted the digital technologies transforming many larger corporates. Fintechs are increasingly challenging the established financial institutions to offer digital solutions for SMEs in the financing and payments space. “This year, we expect fintechs to identify further needs of SMEs and deliver creative and customised products to them,” says KAE's Juan Zafra.

Open APIs

Ushered in by PSD2, which requires banks in the EU to allow third party access to customer account and payment data ('Access to Account') by 2018, application programme interfaces (APIs) will “be crucial in facilitating effective and secure communication amongst different financial services providers” according to KAE's Matyas Fekete. This will open up the market to third parties, which could change the dynamic between bank and client. Fekete adds: “From 2018 onwards, open banking will improve choice for customers as well as foster innovation and competition amongst banking services providers.”