Top 5 trends shaping the expense management market
Three years ago, SAP’s acquisition of #expense #management software provider Concur sent shockwaves through the expense management industry. Its impact continues to shape the evolution of the #market today. The pairing of Concur, already the expense management market share leader, with SAP, one of the largest ERP software providers in the world, sent a clear message to the rest of the market: significant advancements and changes would be required to keep pace with the market leader. As a result, competing providers have responded with a flurry of product enhancements and strategic partnerships.
As shown in Figure 1, some of the major players in the expense management market have moved quickly to leverage new, customer experience-enhancing #technology. They have pursued partnerships with complementary providers to compete with the massive scale achieved by SAP and Concur together. Perhaps most notably, Certify united with a number of leading expense management specialist providers in the past year to broaden its offering and emerge as a formidable challenger.
Figure 1. Expense Management Market Activity Timeline
Five key #trends
Based on this recent activity, five key trends appear to be driving the future direction of the market:
- Market Consolidation: Merger and partnership activity is likely to continue as providers try to close the gap on market share leader, Concur.
- Expense and Booking Convergence: Integration between expense management and travel booking tools is becoming more common and creating a more streamlined process.
- Virtual Card Integration: Virtual card issuers are continuing to develop points of integration for payments with booking and expense management solutions.
- Automation and Machine Learning: Providers are exploring new ways to leverage smart technologies, such as OCR, chatbots, and geolocation, to automate the expense management process.
- Real-Time Expenses: As transaction data is loaded to expense management solutions at the time of sale, approvals and reimbursements are being handled in real-time, rather than in expense report groupings.
Implications for commercial card issuers
While many of the potential market changes will be driven by expense management software providers, commercial card issuers will also feel the impact of the evolving market. For them, the implications of the key expense management trends may include:
- Rising demand for virtual cards used for travel
- Significant opportunity for booking tool integration
- Increased bank investment in travel card programs
- Higher end-user expectations for user-friendly interfaces and functionality
- Increased competition among issuers for #fintech partnerships
- Customer emphasis on travel-friendly mobile payment functionality
As the market continues to evolve, the coming years will reveal what roles providers and commercial card issuers will play in #shaping the future expense management landscape.
To see how consumer interest in expense management services vary by age groups, read our recent report: Driving the Future of Payments: 10 Mega Trends
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