By: Arshdeep Singh
In the same way that other businesses are proliferating, fintech (Financial Technology) is also snowballing. New and advanced technologies have taken over the financial industry, improving the whole range of financial services and making it easier for people to handle the stock market, small businesses, economic systems, and the insurance industry. As a result, there is a lot of demand for custom software development methods. The rise of cashless payment systems and other advanced technologies like machine learning, blockchain, automation, bank loans, or consumer financing has changed many businesses in a big way. The rise of fintech, or financial technology, has had a significant impact on many small businesses and big businesses that deal with money. Here, we’ll talk about how companies can benefit from new fintech tools if they have a good plan for using these new tools.
Unfortunately, borrowing money from traditional banks is often a long and challenging process.
In reality, it could take anywhere from a month to up to 180 days for a business loan to be approved. Lenders need to do a full credit check on the applicant to see if they can pay.
You can get loans that go through quickly, like personal loans, but they usually come with higher interest rates and a cap on how much you can borrow, so you might not want to get them.
According to a report from Shopify, only 20% of small businesses got the total amount of money they asked for in loans.
Benefits of FinTech
- Efficiency gets a boost:
At its foundation, fintech is all about making conventional financial procedures quicker and more efficient.
This is done by cutting out the middleman and automating everything, which leads to lower costs, happier employees, and better customer service.
One common myth is that fintech applications are only suitable for financial businesses. This isn’t entirely true. Fintech applications are already being used by smaller businesses than banks and lenders.
Given that small businesses use automation and digital technology to make the most of their limited resources, this isn’t a surprise at all.
That is why things like payroll fintech are so popular right now and why they are so important. They want to make it easier for businesses to pay their workers. This is what they want to do.
In this case, workers can get their paychecks at any time, not just on payday. This is called “salary on demand.” As a bonus, they might get paid in cryptocurrency or get a salary advance that has better terms than a loan.
By giving these benefits to workers, you may be able to boost their morale and productivity, which in turn will make your business run more smoothly.
- Payments go through more quickly:
Cash flow is vital to the survival of any business, but it is essential for small businesses with few resources.
It’s good to know that this is one area where fintech can make a big difference by automating and speeding up payments.
Getting paid quickly is no longer a significant advantage; it has quickly become a necessity.
- Customers stay for a long time:
If you pay attention, you will see that all financial technology applications have the same goal: to make it easier for people to use them. I agree. That’s one of the main reasons why fintech is out there, too.
One of the first groups to start using new technology in the field of finance was a group called “challenger banks.” They started because people were tired of the inconvenient nature of traditional banks.
- Risk management is better:
Improved risk management is an essential but underappreciated part of fintech.
You are wrong if you think risk management is only for banks and financial institutions.
Every company takes a chance.
A simple example is a landlord who is worried that his tenants will not pay their rent on time. If they don’t have a way to check the creditworthiness of people who want to rent from them, they’re gambling with their money.
If a company sells high-ticket items, this is even more true.
- Financial operations will be more efficient:
Finance is one of the most critical, but often mishandled, parts of a business. Fortunately, fintech is good at making things easier when it comes to money.
With the rise of digital banking systems, businesses can now manage their books and automate important financial tasks more easily than before.
For one thing, business owners can check their bank accounts at any time with digital banking apps.
In addition, they can watch transactions in real-time and get alerts right away when things happen that are important. In addition, digital banks allow owners and managers to send and receive money quickly.
Access to digital banks is limited for traditional businesses. It lets you create accounts with limited rights for certain employees.
Consequently, you should give your accounting staff the ability to move payments and check balances, but not to take money out of the account.
Opening banking will be vital if you’re making a fintech app that helps make financial processes more efficient. It makes it easy for you to put your customer’s digital banking functions into your app.
Fintech can also be a good tool when it comes to accounting and bookkeeping.
If you want to keep track of your money, you can use cloud accounting tools like Xero or QuickBooks to do it online.
In addition, receipts can be scanned from a smartphone, which saves employees time and effort from having to encode them manually.
In addition to the advantages mentioned above, financial technology also provides. It contributes to the evolution of conventional financial services. Create new goods and services to stimulate innovation.