Panel: The Future of B2B Commerce Is Balancing Innovation With Risk Management

Teamwork makes the dream work, especially when that dream is better B2B payments.

With FinTech innovators increasingly pairing up with secure and reliable financial institutions, the future looks bright.

Tribh Grewal, head of FinTech partnerships at Discover® Global Network, and Jonathan Vaux, head of propositions and partnerships at Thredd, discussed with PYMNTS how FinTechs and traditional financial institutions are forming alliances to address legacy opportunities and challenges in B2B while driving change for the road ahead.

Vaux said FinTechs like Thredd are using technology to create tailored services for digital intermediaries, particularly in industries like travel. The deployment of solutions like virtual cards has facilitated seamless cross-border payouts, helping to address the longstanding inefficiencies associated with cross-border payments — cost, transparency and tracking.

Grewal echoed this sentiment, saying businesses today are eager to digitize and globalize their operations, moving beyond traditional invoice payments. Discover, through collaboration, focuses on building a versatile ecosystem that supports digital payments and cross-border capabilities for small- to medium-sized businesses (SMBs), travel providers and corporates.

“B2B travel is an area where we’ve seen significant activity,” Grewal said. “Companies in this space are looking for solutions that enable digital payments and cross-border transactions while reducing costs. The shift from invoice-based solutions to virtual cards and other innovations has been pivotal.”

Both experts stressed the importance of the evolving ecosystem in B2B payments. As Vaux put it, banks have traditionally built products in silos, resulting in disconnected services and inconsistent user experiences across channels. FinTechs, by contrast, specialize in niche solutions and can cater to specific customer segments. The shift has opened the door for more collaborative models between FinTechs and banks.

“In the consumer space, the landscape is still tightly regulated and walled off,” Vaux said. “But in B2B, where services were previously underserved, there’s more room for FinTechs and banks to collaborate and co-create solutions.”

Discover has successfully collaborated with FinTechs to co-develop solutions that banks may find challenging to innovate on their own, Grewal said. Whether it’s managing know your business (KYB) compliance or integrating accounting and payment solutions, collaboration is a critical strategy for success.

One recurring theme throughout the panel was the focus on SMBs, a historically underserved segment in B2B payments. Vaux said FinTechs have transformed the SMB landscape by offering payment acceptance, integrating accounting solutions and eventually expanding into card issuance and lending. With better visibility into cash flow, FinTechs can provide tailored lending services, offering SMBs faster access to working capital than traditional banks.

Grewal agreed, adding that FinTechs’ ability to integrate acquiring and acceptance solutions allows them to offer more efficient and cost-effective lending options. SMBs “face high hurdles when accessing financing, and FinTechs have stepped in to streamline the decision-making process, leveraging data to offer bespoke solutions.”

One of the key challenges in taking a combined approach to driving B2B payments forward is balancing the speed of innovation with robust risk management and compliance.

Grewal emphasized the importance of performing due diligence when choosing partners, highlighting the necessity of a comprehensive approach to risk assessment — one that includes regulatory compliance, cybersecurity measures and contractual safeguards.

“It’s not just about avoiding risk but managing it appropriately,” he said. “We focus on building partnerships that are secure but don’t introduce unnecessary friction into the payment process.”

Vaux highlighted the need for flexibility and appropriate risk management processes, saying banks often impose rigorous compliance and due diligence requirements that can deter FinTechs from partnering. To counterbalance this, he advocated for phased approaches, where banks gradually integrate FinTech solutions with a controlled level of risk, monitoring performance closely before scaling up.

As the ecosystem of FinTechs and financial institutions becomes more interconnected, cybersecurity as well as risk management has become a top priority. Vaux underscored the proliferation of cyber threats in B2B payments, where high transaction values present attractive targets for fraudsters. The increased number of parties involved in transactions also creates more potential points of failure, necessitating a collaborative approach to risk mitigation.

“Hackers are constantly searching for the weakest link,” Vaux said. “The more parties work together to integrate best-in-class solutions, the better protected the entire ecosystem becomes.”

Grewal shared that the approach for Discover is to build security into product development, such as using virtual card numbers with single-use capabilities and configurable limits.

“We focus on minimizing risk while ensuring frictionless transactions,” he said. “Security features must be integral, but they cannot disrupt the customer experience.”

Both Grewal and Vaux agreed that partnerships between FinTechs and traditional institutions will be pivotal in the future evolution of B2B payments. As customer expectations continue to rise, there is an increasing need for tailored, niche services that banks alone may not have the resources or expertise to develop in-house.

Vaux predicted the emergence of new technology stacks, integrating in-house and partner solutions and allowing different providers to play specific roles in the payment process.

“Banks will likely focus on their strengths in compliance and risk management, while FinTechs continue to innovate at the user experience level, creating a layered ecosystem where everyone brings their ‘superpower’ to the table,” he said.

Grewal highlighted the growth potential, citing research that projects expansion in B2B payments, reaching billions of transactions and trillions in volume in the next few years.

For banks, the future lies in forming the right partnerships and tapping into new customer segments by offering customized and differentiated services, he said.

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