By Scott Dawson, Head of Sales and Strategic Partnerships, DECTA
A quick Google search for “recession” reveals many articles predicting that one is inevitable. While much of this speculation has emerged because of a mass media echo chamber, businesses should still prepare for the worst.
There are many ways to do this, but investing in trendy new technologies, such as NFTs, is not the answer. In this turbulent environment, artificial intelligence (AI) is alluring due to its promise to automate tasks and save money. But it’s essential to separate AI’s hype from reality and understand its limitations, especially as it can erode card-one consumer trust by companies and is essential to their success.
Considering this, it’s essential to explore the state of the economy, the cash flow crisis, AI’s potential to mitigate the issue, and alternative solutions that could be key for businesses to survive, thrive and maintain that all-important consumer trust.
The current economy…and the imminent threat of recession
As global economic uncertainty mounts, concerns about a recession loom, with serious implications for companies across the business spectrum. During a recession, businesses typically face reduced consumer demand, higher unemployment, and tighter credit markets. These factors can significantly impact cash flow, making it essential for companies to find innovative ways to survive and thrive in challenging times.
Cash flow is essential for any business, but it can be difficult to maintain during economic downturns. Reduced revenue, delayed payments, and increased expenses can strain a company’s finances. According to one estimate, companies with annual recurring revenue of more than $100 million spend around 20% of that revenue on ‘General and Administrative’ expenditures, which could include anything from office space to accounting and payroll.
One obvious way to improve cash flow is to reduce costs. AI can help businesses do this by automating tasks and improving efficiency. For example, AI-powered chatbots can handle customer service inquiries, freeing up human representatives to focus on more complex tasks.
In addition to reducing costs, AI can also help businesses increase revenue. AI-powered marketing tools can help companies target their marketing campaigns more effectively, resulting in more sales. AI can also be used to develop new products and services that meet customers’ needs more efficiently and cost-effectively. In addition, AI can potentially significantly improve cash flow for businesses of all sizes. By automating tasks, improving efficiency, and reducing costs, AI can help companies free up resources that can be used to invest in growth opportunities and weather economic downturns.
AI’s promise
There is a great deal of hype around AI’s impact on the business world, promising to automate tasks once reserved for skilled professionals. Machine learning algorithms and neural networks can process vast amounts of data, identify patterns, and make predictions. This capability can be harnessed to optimize operations, reduce costs, and boost efficiency.
One of AI’s key advantages is its ability to automate repetitive and time-consuming tasks. For instance, in the financial sector, AI-powered chatbots can handle customer queries, freeing up human employees to focus on more complex matters. AI-driven data analysis can also detect potential fraud and anomalies in financial transactions, mitigating risks and losses.
However, it’s important to recognize the technology’s current limitations. While it can excel at automating specific tasks, it cannot replicate human judgment and intuition. Complex decision-making processes, creative problem-solving, and tasks requiring empathy remain largely beyond AI’s reach. Implementing such systems can also be expensive and may not deliver immediate savings.
Perhaps the most critical factor is trust: despite the extensive press coverage, we’re still unsure whether the public fully trusts AI. We may be facing a similar scenario as we saw with NFTs a year ago, where the tech press was enthusiastic about a new product, but the public is still skeptical about its benefits.
Alternative solutions to issues in payment systems
AI is a promising technology but is not a silver bullet for all business challenges, especially during a recession. In many cases, focusing on improving existing systems and processes can be just as effective, if not more so, at saving money and ensuring the smooth operation of a company.
One key area where businesses can make significant improvements is their payment systems. Inefficient or outdated payment processes can lead to unnecessary costs, delays, and errors. Bespoke payment systems offer a unique opportunity for businesses to leverage technology to their advantage.
By tailoring payment solutions to their specific needs, businesses can optimize their payment processes, reduce transaction costs, and enhance customer experience. Bespoke payment systems are designed to adapt to each company’s unique needs, ensuring that payment workflows are efficient and reliable. Additionally, streamlining payment operations can improve cash flow management and reduce the risk of financial disruptions during economic downturns.
About the author
Scott Dawson is Head of Sales and Strategic Partnerships at DECTA. Scott is a highly motivated and results-oriented individual with over 20 years of experience within the payments industry. Previously, he served as Commercial Director at Neopay, the market leader in delivering compliance solutions to eMoney and payment institutions. Scott has also held fraud management positions at PSI Holdings and Neteller before becoming Senior Fraud Manager and then Business Development Manager at ClickandBuy, which Deutsche Telekom acquired.
About DECTA
DECTA provides end-to-end payment infrastructure, from acquiring to issuing and processing, but unlike other players in the crowded payments marketplace, they offer bespoke-as-standard solutions to make payments accessible to everyone. The company is headquartered in the UK and has offices around the world. DECTA’s seven core products have seen more than 2,000 merchants harness its technology, resulting in more than £ 1 billion in transactions globally.
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