B2B Payments

Where Biz Will — And Won’t — Take A Risk

This week’s B2B Data Digest is all about risk — though, not always in the traditional sense.

For instance, there’s the risk of a cyberattack. New data uncovers just how much money is lost due to these attacks, as well as how much money corporations plan to spend both on cloud security and Internet of Things security as the threat of cyberattacks continues to rise.

Then, there is the risk of corporate lending. Banks, it turns out, are willing to take on that risk. But for businesses — especially smaller ones — the risk of taking on new debt, or even the risk for being turned down for a loan, is too much to bear.

Finally, there is new analysis on the risks tied to the buyer-supplier relationship, but this time, the risk is felt on the supplier side. We break down all of the risky business of B2B finance, cybersecurity and trade below.


$8.9 billion will be generated by the cloud security industry by 2020, researchers from Allied Market Research concluded. That value represents a 23.5 percent compound annual growth rate between 2015 and 2020, with North America dominating the cloud security sector. The Asia-Pacific region, however, is hot on its heels, with rapid growth forecasted for this time period. The rise in BYOD within the enterprise and the popularity of software and cloud technology across verticals are key factors behind the accelerated growth in cloud security tools and services, researchers found. 

$348 million expected to be spent on Internet of Things security by both businesses and consumers, according to the latest statistics from Gartner. That represents a 23.7 percent increase from 2015, and the numbers are only expected to rise. IoT security tools will be key for corporates as machinery and other aspects of the supply chain become IoT-enabled, like commercial aircraft, freight, farming and construction equipment, researchers found. Further, by the end of the decade, analysts predict that more than 25 percent of cyberattacks on the enterprise will, in some way, involve IoT technology. 

$240 million is lost to invoice fraud a year by businesses in the U.K., said an eyebrow-raising report released last week by Tungsten Network. When broken down, that total means a fifth of businesses surveyed lost $7,300 in the last year — each — due to fake invoices. Researchers pointed to the financial services sector as most vulnerable to these crimes, with 13 percent more than the national average reporting having received a fraudulent invoice in the last year. The good news, said Tungsten, is that FinServ businesses are more attuned to this threat than other sectors, with more companies in this industry than others reporting invoice fraud as a top threat.

70 days pass between when an invoice is sent and when it is paid in China, according to new data from Wind Information. That represents the median days payable outstanding timeframe for Chinese B2B deals in 2015, an increase of 10 days just the year prior. It marks the longest wait period for suppliers to get paid in China in 14 years, reports said. Economists point to a “bottleneck” in the economy, where wealth across corporations is not trickling down evenly enough, and it could highlight the risk suppliers must take on when working with new business partners that could unexpectedly lengthen their payment terms.

78% of SMEs don’t take on financing because of the risk, according to a new study from Wesleyan Bank. The FI, which surveyed 500 businesses across the U.K., found that the risk associated with debt is turning SMEs away from external financing, traditional banks or alternative lenders. Seemingly contradictory findings also found that, instead of taking on the risk of debt, some small business owners wouldn’t necessarily rule out the risk of gambling or illegal activity to save or finance their companies.

44% of Irish SMEs avoid applying for a bank loan based on the risk they’ll be rejected, new research from academics has found. That figure drops to just 22 percent when focused on Germany, 19 percent in Greece and 17 percent in Spain. These figures represent so-called “discouraged borrowers” and, according to researchers, increase as the size of the business gets smaller. Businesses in this category don’t even bother applying for a bank loan for fear of being rejected and simply aren’t willing to take the risk of that rejection.

43% of global cyberattacks targeted SMEs last year, according to analysis from Symantec. The statistic was cited by U.S. policymakers that anticipate the rising threat of cybercrime against the nation’s small businesses, leading the House Committee on Small Business to prioritize SME cybersecurity, reports said last week. Lawmakers held a hearing to discuss the threat and the role of federal authorities in identifying, preventing and mitigating the risk. Methods of cyberattack highlighted by committee members included phishing, ransomware and invoice fraud.

1.1% growth in corporate lending among EU banks marked good news for the economy in the Eurozone. While 1.1 percent doesn’t seem like much, it’s actually the fastest pace of growth in bank lending that the region has seen in nearly five years, data from the European Central Bank said. That lending increase occurred in March of this year, though reports did not indicate whether that growth occurred among SMEs or large organizations and pointed to fluctuating lending trends across EU Member States. Still, it seems banks are willing to take on the risk of lending to European businesses amid economic recovery.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

Click to comment