Organizations in the business sector are typically classified into one of two types. These classifications are based on the sort of consumer to whom they offer their goods or services. Companies that offer products to other businesses are classified as business-to-business (B2B). Organizations that sell straight to customers are classified as business-to-consumer (B2C).
Businesses frequently sell to both other companies as well as to individual consumers. A bank, for instance, may provide individual checking accounts to customers as well as corporate credit lines. However, in these situations, the two streams typically operate as independent corporate organizations, within each advertising, sales, and other operation.
The area of financial technology, called fintech, is no exception. There are fintech services for individuals, fintech products for companies, and fintech solutions that operate for either but function differently for B2C versus B2B clients. And here is what you really want to know about the distinction between B2B and B2C in the fintech industry.
B2C in Fintech Industry
B2C fintech solutions often focus on the goods and services provided by the majority of large banks. Bank deposits, bank deposits, credit cards, consumer lending, internet payments, individual economic management, investment, as well as retirement investments are all examples. There are also B2C fintech alternatives that combine all or most of these products into a single digital-only bank.
Although fintech solutions date back to the late 1800s when individuals were first able to send money by telegraph due to Western Union. The important thing to note here is the fact that Netbank was the first profitable all-internet bank in the late 1990s.
This institution was short-lived, but it contributed to the mainstreaming of online banking, so by the early 2000s, a large bank like Bank of America had more than 3 million online members.
The decade of the 2010s saw the emergence of a slew of B2C fintech firms. These firms raised millions of dollars from shareholders and significantly impacted the financial and banking industries. While some businesses failed, others thrived. Most of today’s leading fintech businesses, such as Affirm, Acorns, and SoFi, were founded in this era.
The B2C fintech audience might be quite diversified. There are B2C fintech options for almost everyone who wants to participate. Having said that, the majority of individuals that use fintech solutions are youngsters.
These people, beginning with the Millennial age, grew up with digital and other forms of technology and are more at ease discussing sensitive matters such as their money online. Young people are an intriguing target segment for fintech in 2021. Fintech businesses are targeting children at a younger age to encourage financial literacy – something that traditional primary schools generally do not do enough of – as well as to generate future clients. This is why, for example, almost all Forex guides for beginners are targeted to the younger people more than the older ones.
What does B2B in Fintech look like?
While everyone is more aware of B2C fintech products, B2B financial services have a sizable market. Fintech solutions are rising in demand both for B2B and B2C markets. Software as a Service is the most important category in the B2B finance industry. This technology drives how banking, insurance firms, retail dealers, as well as other financial organizations maintain the technology that they provide to customers.
One of the very first significant positive stories in B2B fintech occurred in the late 1990s, with PayPal. Envestnet established a technological platform for financial products and asset management firms in 1999. Their plan was to level the industry so that all financial advisers had equal access to technology, allowing them to provide the best piece of advice to their customers.
Additional success stories emerged as the web became increasingly integrated into business in the early 2000s. Shopify was one of the largest. Shopify, which was founded in 2004, offers a full-service e-commerce digital platform for businesses and other retail enterprises.
B2B fintech was actually more popular than B2C fintech. Its initial boom occurred in the 2000s. This decade marked the critical threshold for the use of technology in business, and many firms took advantage of this trend. While they may not be big names like their B2C counterparts, businesses like BlackLine, and Avalara are just as successful in their respective industries today.
Any firm that wants to do business on the internet or be linked to the newest digital developments. Nevertheless, there are other industries where B2B fintech is more prevalent. B2B fintech is widely used by online-only shops and technology enterprises.
Overall, Even if fintech does not continue to expand at the stratospheric rate that it has over the last 20 years, it is still expected to grow at a rapid pace. This indicates that fintech will become more prevalent in our daily lives in the future years and that fintech will still continue to make firms more accessible to customers and lucrative to shareholders.