Fintechs: Key Partners for Company Digitization

As companies make their way through the digital transformation, they face the challenge of an increasingly demanding client looking for different options to make their purchases. For many players, managing digital transactions has been a challenge, especially considering the lack of traditional banking penetration among SMEs. Enter fintech.

B2B fintech solutions have focused mainly on business financing, invoice cash management services and payment solutions. The payments segment of the fintech industry continues to grow in the Americas and, while global investment in technology companies is slowing down, the region stands out as a leading investment attractor, according to the bi-annual “Pulse of Fintech” report by KPMG. The firm expects more mergers and acquisitions of payments-focused financial technologies as companies hope to grow their participation in the digital ecosystem. Still, acquisition value could drop due to the impact of recent devaluations of various fintech companies.

According to the CB Insights’ “Q32022 State of Fintech Report,” fintech funding dropped 64 percent year-on-year, with US$12.9 billion raised across 1,160 deals in 3Q22. This was the sector’s weakest quarter since 4Q20. Currently, the US continues to lead regional deal share (39 percent), followed by Asia (25 percent), Europe (22 percent), Latin America and the Caribbean (6 percent), Africa (4 percent), Canada (2 percent) and Australia (1 percent). Regarding trends, payments are grabbing the lion’s share of the investment with US$3.9 billion and 178 deals. Following up are insurtech (US$2.3 billion) and digital lending (US$2.1 billion). Both sectors have gained traction, given customers’ desire to have more opportunities to acquire customized services.

As digital payments gain ground among consumers and businesses, new digital financial services are emerging to facilitate a multitude of economic transactions, which in the future will increasingly be carried out through embedded finance. B2B companies perceive that this new financial formula will enable them to streamline business and are adopting embedded finance to offer their customers and employees a wide range of financial services. Developing these capabilities internally can be complicated, so companies are turning to external providers to address the challenges. Among them are fintechs, which facilitate the provision of these types of services, states a research paper by Juniper Research and Galileo Financial Technology.  

According to Juniper and Galileo, 85 percent of 450 surveyed B2B businesses are familiar with the concept of embedded finance, while 65 percent of those not currently offering an embedded finance solution are now considering adopting one. “The dramatic rise in the adoption of digital payments among both consumers and businesses has enabled people and businesses to do more with technology than ever before, paving the way for enormous growth for embedded financial services. The market has evolved at lightning speed and this new research confirms that forward-thinking B2B executives are embracing embedded finance solutions as a key part of their growth strategies,” said Seth McGuire, CRO of Galileo Financial Technologies. 

There is also an increased interest among companies in ESG solutions, which means fintechs committed to these practices are favored by investors, particularly those focused on climate change, decarbonization and the circular economy. Investments are focused on projects that help to improve financial inclusion, favoring developing economies as a result. This preference also increases the likelihood of new unicorn companies developing in these regions, stated KPMG. 

“Digitization is undoubtedly driving this evolution. But keeping pace with the changes we are currently seeing, and those we are predicting are coming, is about more than just advancing digital offerings. Instead, the future of financial services will be won by those brands that focus on being open, connected and human-centric in their approach,” said  Derek White, CEO of, Galileo Financial Technologies, LLC.