From paying for a client lunch on your smartphone, to logging it as expenses on your mobile banking app and updating your accounts, FinTech is omnipresent. It has become second nature without many of us even noticing and, like a check-up at the dentist, it sounds much more ominous than it really is.
In their first guest post for Yozu, The Accountancy Partnership explore the benefits that FinTech can bring to businesses and their customers. No scary grimacing necessary…
What is FinTech?
First, let’s break down the word itself: ‘FinTech’ is simply the combination of ‘financial’ and ‘technology’. It was coined in the early 90s but only really became mainstream lingo following the rise of internet banking.
In terms of concept, fintech is all about breaking the mould of traditional financial services. By combining finances with technology, these firms aim to develop more innovative products, processes and services.
Some everyday examples of FinTech that definitely aren’t scary…
There’s a strong chance that you already use these products on a regular basis, probably without even thinking about it. Household fintech names we bet you’re familiar with include:
Kickstarter
GoFundMe
Apple Pay
PayPal
Monzo
Starling Bank
Venmo
Stripe
Klarna
TransferWise
The benefits of FinTech for businesses in 2021 and beyond…
There are certainly plenty of plusses for businesses which make use of the financial technology that’s available.
Reaching new customers
Being able to offer more sophisticated payment methods means that businesses open themselves up to a wider pool of customers. For example, a smaller business might now be able to use fintech tools to facilitate international sales they couldn’t previously tap into.
It can also help you attract local customers too – for instance a store which previously only accepted cash payments, which now has other payment methods.
Better customer experience
Not only does fintech hold the key to new audiences all over the world, it also provides all of your new and existing customers with a slicker, more streamlined experience when it comes to transactions and the payment process. It helps customers feel more secure in doing business with you, which is only ever a good thing!
Working in real-time
Fintech tools help give businesses more visibility when it comes to accounts. Rather than waiting for a bank statement to be delivered or a customer invoice to arrive in the post, you’ll be able to monitor your finances and any changes as they happen. It also enables real-time payments, negating what is often known in the industry as ‘float’ time (the delay between when a payment is made and when it hits the bank).
Making rapid, well-informed decisions
Real-time processes and data are good for making decisions about your business. Using the most up-to-date and accurate information as the basis for planning (or reacting) almost always means a better chance of success.
Fintech also:
- Provides alternative (and much faster) credit-checking options
- Reduces the amount of time spent on manual processes, or on waiting for information to become available. For instance, using Bank Feeds to connect your bank account transactions to your bookkeeping, to update information automatically
- Funding is more accessible, because decisions can be made more easily, and funds transferred more quickly. A factor that is especially poignant in the ongoing pandemic climate.
Helps businesses monitor their financial activity more effectively, and enables them to flag up any issues which need more attention – such as times they might be overspending, or areas that need investment to become more efficient.
Hopefully this article has confirmed our claims that fintech isn’t so scary after all. It might sound a little complicated but the business benefits certainly do stretch out far and wide.