How companies can navigate their business finance in 2023 and take advantage of key trends such as embedded finance
Looking back on 2022, the most visible change was our rebrand from MarketFinance to Kriya. It’s no easy task to change your name and identity, but we wanted a brand to reflect how we are broadening the way we support businesses by removing the financial friction that stands in the way of doing the business they want. Kriya is a Sanskrit word which means being in a state of flow and completed action, and we want our customers’ business to flow brilliantly in 2023 and beyond.
The challenges facing businesses
There’s no better time to fight this mission. 2022 was a challenging year for companies across the country. It started with hopes of a return to normality after Covid; but suddenly business leaders had to cope with the impacts of high inflation, tight labour markets, sharply rising interest rates and persistent supply chain bottlenecks arising from a locked down China and a war in Ukraine.
Many businesses took advantage of Covid lending schemes over the past years, but the end of this support has coincided with access to cash becoming harder. While free money was pumped into the economy during the pandemic, suddenly, after ten years of low interest rates, the cost of finance is now much higher and twinned with a potential recession coming in 2023. The political turmoil of the autumn has also constrained the extent to which the Treasury can intervene again to support businesses.
Fintechs like us aren’t immune to these dynamics. Against this backdrop we had to think about which products to offer, our pricing and risk tolerance. I’m proud of how we finished our Recovery Loans programme and scaled up our other lending products such as invoice finance in the second half of the year to fund a total of £430 million to our customers in 2022. We worked hard to cope with the increased demand by collaborating closely with customers, partners, the British Business Bank and our bank funding partners such as Barclays, Intesa Sanpaolo, and Deutsche Bank.
The Kriya advantage
One of our key advantages is that we can offer multiple lending options. This means we’re able to offer the right finance to suit the market environment. When it becomes harder to offer long-term unsecured loans, we’re able to offer businesses access to working capital through invoice finance and leveraging future contract payments. More businesses will have to educate themselves on how they can best use this type of finance given the lack of equity and unsecured debt finance in the market. Those who don’t adapt to the new environment will fall behind.
The launch of Kriya Payments
Alongside our Lending, we’re proud to have launched Kriya Payments in 2022. Leveraging all our experience in B2B transactions over the past 11 years we’ve now made it possible for B2B suppliers and marketplaces to use our technology to offer seamless payment, credit and B2B Buy Now Pay Later options at check-out. This plays into the huge trend of how more businesses are meeting and transacting online, and we’re proud to be already facilitating over 3,300 payments per month, with an exciting pipeline of future users and partners.
And this is just a start as we look to add more tools to help businesses smoothen the way they identify, verify and transact with their customers digitally.
What does 2023 look like
The themes for 2023 are simple: Businesses will need all our help to navigate a much tougher economic climate. They will need to be smart in how they seek out working capital and optimise how they make and receive payments to stay ahead of their cash flow plans. They need to keep their customers loyal by making it very easy to deal with buyers and suppliers. They will have to think about how to attract new buyers and operate in different geographies to find new demand.
Equally there is no stopping the trend of embedded finance as more financial solutions can be integrated directly and instantly into the touch points between businesses and the software that businesses use. McKinsey predicts this market (already worth £20 billion in the USA alone) could double in size within the next three years.
The scale of this opportunity will result in more scope for fintechs, marketplaces, eCommerce players, banks, payments companies and data providers to work together to optimise the customer experience. At Kriya, we’ve already seen the benefits of this collaboration in the work we’ve done over the past years and look forward to deepening and broadening our partnerships this year.
No-one knows what 2023 will bring, but it’s a year that will reward pragmatism, staying alert to the opportunities and the pitfalls, while still investing to find big breakthroughs. It’s worth remembering the whole fintech movement was sparked by the sharp downturn after the Global Financial Crash which led many entrepreneurs like myself to question the status quo.
So as we enter the new year I’m wishing good luck to all and at Kriya we’re going to continue what we’ve always done, which is be there for the businesses and partners that need us most, through the good times and the more challenging.
New Kriya research finds that UK B2B firms with e-commerce operations do not plan to offer ‘buy now, pay later’ terms to their customers for another 3 years, despite 92% knowing what Embedded Finance is, and how it helps accelerate their revenues with more sales and 5x higher order values.