Businesses are investing for growth despite continuing economic headwinds
- Nearly half of the businesses are trying to bring in new revenue by focusing on growing customers and investing in new product features.
- Two-thirds of financial services businesses say the risk of economic slowdown has made them focus on improving their margins, shows a new Stripe report.

Despite economic challenges, businesses are eyeing new ways to increase revenue in addition to reducing operational costs.
Two-thirds of financial services businesses say the risk of economic slowdown has made them focus on improving their margins — roughly the same proportion as all businesses, according to a new Stripe report.
But financial services businesses are pretty evenly split about whether growing revenue or cutting costs is the higher priority metric to do that.
New revenue streams
Nearly half of the businesses are trying to bring in new revenue by focusing on growing customers and investing in new product features to attract customers away from competitors.

61% of financial services businesses are currently experimenting with new ways to grow their revenue online, offering more payment methods and localized checkouts. 76% agreed that off-the-shelf payment tools mean their business can maximize revenue without incurring significant costs – with 49% already employing a Direct-to-Consumer (DTC) retail model.
In a DTC model, brands sell directly to new customers. It skips the wholesale middlemen and eliminates the need to join forces with big retail brands and brick-and-mortar stores.
“We think the idea behind increasing revenue streams is that better tools now exist to help businesses grow their revenues online without growing their costs,” said Emily Glassberg Sands, head of information at Stripe.
Interest in embedded finance tools
To create a better experience for customers, businesses are integrating financial services such as payments, lending, or insurance into their offerings.
Enabling businesses to provide financial services tailored to their customers’ needs – like prequalifying customers based on their payment histories or issuing expense cards – can increase customer lifetime value and vertically scale a product offering. This explains why many non-financial businesses are bullish to integrate financial services into their infrastructure moving forward in 2023.

Among the 2,500 business leaders surveyed across a variety of industries, 74% said they are likely to embed digital financial services in 2023. 45% are aiming to offer charge cards – that charge no interest but require the customer to pay the statement balance in full, usually monthly – and bank accounts for their customers. This is followed closely by 44% eyeing to integrate payment services into their platforms.
“A lot of the infrastructure these platforms use is programmable for other business models too. Ramp is building its integrated expense management platform with Stripe Issuing that scales a commercial card program, for instance,” Sands told Tearsheet.
Automation = lower operating costs
It's difficult to determine whether lowering costs or increasing revenue is more beneficial for companies at large. There are too many factors that weigh in amid a shaky economy – however, the profit margin is a metric that always deserves to be on a company’s radar.
One way to optimize business processes while reducing spending is through automation. Businesses are cutting costs by centralizing their data on interoperable platforms, driving meaningful automation.

Businesses are especially willing to automate invoicing and B2B payments, as well as revenue reconciliation and accounting. A majority of respondents said that if they could free an hour of their engineers’ time each week, they would allocate more than 20% of that time to researching or developing new products and another 20% to improving existing products.
Many company leaders seem unwilling to scale back expansion or pause new product launches. They are deploying automation technologies primarily to close operations gaps that traditionally involve hours of manual work. By automating workflows, they plan to improve their profit margins, which in turn, lowers operating costs and also reduces the load on other business divisions.

However, process automation needs a comprehensive strategy across the board to make things work. The biggest challenge of automating within an existing payments stack is that this approach might not necessarily help drive efficiencies – especially if it is an in-house solution. Of the nearly 20% of businesses that built or deployed their own payments software in a move to automate operations, just over half (52%) regretted the time and cost, and nearly three-quarters (73%) said it came with opportunity costs like increased opex.
The real question to ask is: will using this software make my processes more or less complex?
“The gold standard is to run financial processes on high-integrity, interoperable platforms that allow finance teams to combine their data from multiple sources and drive wholesale automation of processes like revenue recognition, reconciliation, and reporting,” noted Sands.
Consolidation of SaaS services
While Software-as-a-Service (SaaS) and cloud services are deployed to streamline processes and help firms reduce their IT costs, they can also be expensive if not managed effectively.
Consolidating SaaS and cloud services can help businesses reduce costs as well as simplify their IT infrastructure. This involves using fewer providers and services, which can reduce the pricing and administrative overhead of managing multiple subscriptions.

59% of the business leaders surveyed agreed that poor data quality makes it harder to close their books accurately and on time. Businesses also named gathering data from multiple sources the biggest time sink for finance teams. 28% agreed in favor of consolidating SaaS providers to better organize their data and implementing more integrated services – like using a unified financial software for recurring payments, invoicing, billing, and revenue recognition into one system — to help in cost reduction.
“Centralizing data across financial processes can make teams more efficient, improve a business’ reporting, and ultimately lower costs,” added Sands.