FinTech is a broad term that refers to the many creative ways that technology is being used to develop, deliver, and transform financial services and solutions around the world. FinTech is revolutionizing the global financial landscape by pushing conventional financial companies to rethink their outdated business models and come up with solutions that are more effective, more customer-centric, and less costly.
From robo-advisors to online-only banks to saving apps and more, the first wave of fintech apps targeted customers. However, the industry is increasingly focusing on small enterprises, offering innovative strategies for a variety of financial tasks.
What does this mean for business owners, though? Fintech isn't all made equal, to be sure. However, at their heart, several businesses are providing ways to automate previously manual tasks, gain access to personalized financial products, and scale the finance operations—all without hiring more people.
Here are five ways that fintech gives your business a boost:
- Easier Funding
Many small business owners need capital to start and grow their businesses.
In the earlier days, you could only get business loans through the traditional methods. A long wait at the bank, lots of documentation, probing your credit reports, and sometimes, startups don’t meet the bank requirements.
However, getting loans is now easy with Fintech. The Fintech industry has introduced solutions that connect startups with potential lenders for easy business funding. These applications can be made online with ease, and most of the time, people get approval within days. Borrowers get capital at lower interest rates than bank loans, and lenders get paid – it's a win-win scenario for all.
FinTech companies are highly motivated to develop financial solutions that exploit the power and utility inherent in these innovations, thanks to the rising penetration of the Internet and mobile telephones in almost every corner of the globe.
Traditional banks charge exorbitant fees for money transfers, which may add up to considerable losses for the parties involved over time. FinTech-developed mobile and online banking solutions minimize the cost of transferring funds between parties while also eliminating the need for paper currency in financial transactions. This increases the transparency of a country's financial system by suppressing crime (which is a "cash-only" business), preventing tax evasion, and opening up the "shadow economy." It also strengthens the market environment, making it more sustainable from the perspective of businesses.
- Simplified Payment Systems
Any company that wants to survive and prosper needs a good money management system. It should be able to receive payments on its invoices using this system; otherwise, it risks losing revenue (and therefore profit) as well as accumulating bad debts. This could make the company's operations unsustainable in the long run. In addition, the company must be able to pay its creditors, employees, distributors, and suppliers. Failure to do so could result in legal consequences as well as a negative effect on the company's credibility in the marketplace.
Payment and receipt processes were difficult to handle in the pre-FinTech era, took a long time to complete, and were mainly cash-based in countries with poor financial infrastructures. Furthermore, the existence of geographic borders made cross-border money transfers and payments highly costly. FinTech has changed everything and made these problems almost obsolete. The marriage of financial services and technology has resulted in the development of online and mobile-based payment systems that enable businesses to collect payments for services provided to clients as well as pay vendors/suppliers for services received, regardless of location or currency.
- Automating Accounting
Financial operations and support are necessary for any company, but they're particularly important for small and growing businesses. You will make better decisions about where and when to spend your money, whether or not a loan is a good idea, and whether or not you can afford your next hire if you have a clear understanding of your finances. Despite this, almost half of all small businesses lack a bookkeeper or accountant. Fintech technologies are emerging to fill some of these voids. Although they can't fully substitute the experience of a real-life specialist, they can help to reduce the workload in the finance department.
Many of the new technologies include online tools for invoice processing, accounts payable, payroll, expenditures, and even cash flow forecasting. Small business owners have a plethora of options available to them. For example, TeamPay is a startup that allows businesses to give their workers virtual credit cards and track and authorize expenditures in real time. Meanwhile, well-known industry players, such as Intuit, the maker of Quickbooks, are doubling down by delivering even more tailored services to SMBs.
- Improved Overall Customer Experience
Fintech helps businesses, including startups, engage with their customers through their mobile phones.
There are Fintech apps with engagement features that allow business owners to connect with customers, whether through automated mail, private messaging, and so on.
Also, Fintech helps businesses learn more about customers. For instance, Fintech payment processing provides information about customers like their interests, demographics, and needs, making it easier to understand your consumer behavior and improve your business to satisfy them.
Almost every company in the world relies on its customers and clients to survive. FinTech solutions provide end users with intuitive product designs, ease of use, and 24-hour accessibility, which makes them happy. They also minimize human interference as a "middle man" and speed up transaction processes. And businesses are pleased because such products and services allow them to measure and reduce business risks, expand their customer base, and create personalized products for their customers. In other words, FinTech assists small companies in growing their sales and profit potential by enhancing customer acquisition, engagement, and retention.
At Wallex, we provide money transfer and payment solutions for businesses where you can make and accept international payments, make conversions in any currency and from any country. Wallex is a reliable and low-cost option for cross-border money transfers. It also offers secure online data access, easy reconciliations, short transaction timelines and hassle-free transfers.
Bulk Payment is a comprehensive institutional network provided by Wallex. Firms can easily handle and monitor their high-volume remittances to multiple beneficiaries and in multiple currencies with this configurable solution. Users can avoid incurring potentially significant losses due to market and currency fluctuations by using Bulk Payment to circumvent banks' high currency conversion costs and achieve better exchange rates.
Talk to us to learn how Wallex can benefit your business by simplifying your payments in single online platform.