Earlier in 2024, we surveyed 300+ CFOs and financial professionals in the Netherlands to study how they view current technology trends and their impact on the finance sector. The research findings were shared in four different whitepapers, entitled the FinTech Baropapers. Let’s sneak a peek at the key takeaways.
#1 AI the leader in technology trends
Although finance professionals see a major influence of big data (36%) and IoT (23%) on the financial process, they find AI (45%) the technology with the greatest influence. One of the promising possibilities of AI lies in automating manual and repetitive tasks, such as manually sending a payment reminder and following up on outstanding invoices.
But where do we currently stand with AI implementation? The research showed that only 14% of organisations have systems that use AI, while 30% are currently developing ideas for their implementation. However, 26% of them are not quite there yet: it is not even on their agenda.
#2 Three main challenges to technology in credit management
Although new technologies -such as AI, RPA and blockchain- are on the rise within the finance department, implementation does not always go smoothly:
- 28% of finance professionals state that their team lacks the skills and/or knowledge to implement the technology.
- 35% find it difficult because implementation requires closer collaboration between IT and finance, which can sometimes be challenging.
- For 11%, cyber security issues complicate the implementation process.
| Did you know? More than one in three finance professionals say they would like to digitise more within the finance department but are being held back by the IT department. |
#3 DSO on the rise in Europe
A high Days Sales Outstanding (DSO) means that it takes longer for a company to collect money from its customers after making a sale. Shortly after Allianz’s research showcased an increasing DSO by +3 days last year, the FinTech Barometer study in 2024 showed that almost half of organisations in the Netherlands (47%) have to wait more than 30 days for their invoices to be paid. But why won’t customers pay? Here is what the respondents said:
What does this mean for the near future? 72% of finance professionals in our study expect the DSO to remain the same or increase in 2024. So, unsurprisingly, one-third of them said they intended to focus more on lowering the DSO. Similarly, Allianz notes that European companies should expect longer payment terms amid squeezing profitability in 2024:
“With profitability looming in 2024, European companies must brace for longer payment terms. This could increase pressure on cash flows and potentially increase the risk of non-payment in the region.”
-Allianz
“We have been in a financially uncertain period since early 2020. One moment things seem to be going in the right direction, the next moment tens of thousands of companies have to repay their previously received NOW support and this turns out to have a major impact on liquidity and therefore the scope for paying invoices. It is especially in periods like these that it is essential for a finance professional to focus on getting invoices paid, and technology is there to support with this.”
-Adriaan Kom, managing director at Onguard.
#4 The generation gap on the road to digitalisation
Employees’ resistance to change is a key factor slowing down or impeding digital transformation: 45% of finance professionals said they feel resistance from colleagues when digitising financial processes. This mostly applies to the older generation. At the same time, it is mainly the older generation that has more difficulty with digital transformation:
#5 Technology in credit management is growing, but manual labour is still a thing
Amid increasing digitalisation, one-third of the respondents opt for manual options for accounts receivable management, despite these proving to be more error-prone:
However, nearly half of the organisations represented in the research (47%) already use ERP systems, and 21% use dedicated credit management software for accounts receivable management.
#6 Traditional payment methods remain popular
While new payment methods are constantly emerging, iDeal, direct debit and manual transfer remain the top three preferred payment methods for both customers and organisations. The familiarity, security and ease of use of these methods seem to be the reason for their continued popularity. Even cryptocurrencies, which have been available for quite some time, are yet to claim their part in business transactions, with just 5% of the respondents finding them an ideal payment method.
So, what are the first steps for organisations to respond optimally to the evolution of payments? This starts with actively researching which payment methods are most suitable for your organisation and customers, says Adriaan Kom, Managing Director at Onguard:
“Do a pilot to see how often customers actually choose that option. After all, it would be a shame to add a new method that is subsequently not used by customers. Be critical not only of new methods but also of methods customers are already using. Check whether they are still used frequently or whether a certain payment method has been depreciated. This way, you make sure you only keep the most relevant methods.”
Do you need help starting up your credit management strategy? Reach out and we’ll show you how.
