FinTech is revolutionizing the global financial landscape by forcing traditional firms to review their outdated business paradigms and come up with solutions that are more effective, more customer-centric and less expensive. Many of these solutions are based on cutting-edge technologies like Artificial Intelligence, Blockchain and Deep Learning that enable financial services firms to collect rich swathes of customer data, deduce usage patterns and even replace human intervention. Through the effective use of FinTech, firms can better manage their cash flows, working capital and international payments, save money, maximize their overall performance efficiency, design tailored products for customers and build better customer relationships.
Some of the ways FinTech firms are acting as game-changers for small businesses include:
1. Easier Business Loans
The largest trend effecting every single industry in the world today is technology; the financial technology, or fintech, industry is the overwhelming proof of the revolutionizing aspects of technology in our world today. The financial technology industry is starting to completely shift the financial sector of our world, similar to the effects that the creation of the internet had on well, pretty much every single industry today. But what is this trendy new hashtag, FinTech? Financial technology is essentially any business that aims their innovative work towards financial services through the use of modern software and technology. Financial technology has actually been around much longer than many consumers realize – there has been a 65 year period of financial technology developments that have led to the current booming financial technology industry. The industry started to play a real role in the finance industry after the creation of credit cards in the 1950’s, and since then, the evolution of the financial technology industry has exploded.
Even though financial technology has played a role in society for a long time, the 2008 Global Financial Crisis is largely credited for the overwhelming expansion and innovation of this industry. After the financial crisis, many American’s were furious at the banking system, leading to distrust for banks everywhere – this was only made worse by the fact that after the recession, banks stopped lending. Businesses, entrepreneurs, and innovators alike were exploring lending alternatives like never before. Now that the economy is finally rebounding, consumers are still wary of incumbent financial institutions, and thanks to the desperate need to explore technological alternatives years ago, there is much more trust in the financial technology industry as reliable funding sources, among other services.
2. Simplified Payment Systems
Fintechs could make the financial system more diverse and competitive, offering customers better-targeted, faster and cheaper financial services. But fintech could also lead to the emergence of new risks and greater concentration. So far, regulators have tolerated or even facilitated these developments. In the EU, for instance, the revision of the Payment Services Directive (PSD2) aims to foster innovation and enhance competition by requiring banks to share account information. But to the extent that fintechs are providing core banking services, regulators and central bankers need to monitor their activities in order to follow risk migration.
3. Profit Maximisation
Although it has not made traditional financial firms completely obsolete, FinTech is revolutionising the global financial landscape by forcing traditional firms to review their outdated business paradigms and come up with solutions that are more effective, more customer-centric and less expensive. Many of these solutions are based on cutting-edge technologies like Artificial Intelligence, Blockchain and Deep Learning that enable financial services firms to collect rich swathes of customer data, deduce usage patterns and even replace human intervention. This convergence between Finance and Technology is ushering in a new era of transparency, efficiency and inclusivity that is reshaping customers’ expectations and setting higher standards for user experience and satisfaction. In general, the term FinTech can apply to any useful invention or innovation that can improve or optimise the way people operate their businesses and conduct their financial transactions. A few such useful products and services that are redefining financial services include:
4. Account Management Tools
There are so many great fintech tools for business. These tools can help you manage your books, get paid faster, and interact with your employees and your customers. Fintech provides you the opportunity to streamline your operations — and do it for less than you might think. If you aren’t using fintech tools for business, you’re missing out. There are tools for almost every aspect of your growing business. They can make your life easier and save you money, allowing you to maximize your efforts.
Whether its comparison shopping or other forms of aggregation, platforms that are transparently bringing together multiple options are fueling consumer choice, educating consumers about personal finance, and creating a free market ecosystem that ultimately helps consumers save money. But they are doing so in an everyone wins scenario because they can store detailed rule sets from suppliers to help them reach the exact segment of consumers that their services are appropriate for – rather than try to carpet bomb consumers in other forms of traditional or digital advertising.