Many people refer to the current rise of fintech as a revolution, and for good reason. Technologies are being developed rapidly, startups are emerging at the speed of light, and consumers throughout the world are embracing the solutions these alternative financial services offer.
It’s easy to get caught up in discussing the technology and its implications for the financial services industry. As a result, it’s equally easy to forget to discuss exactly how certain fintech products will actually benefit consumers and businesses. Here are just some of the ways businesses both big and small can use fintech to grow and thrive.
Fintech is making it easier for small business owners to acquire the funds they need to grow their companies. Many traditional lenders, like banks, are hesitant to loan money to companies that they view as financial risks. This is understandable. The problem is, banks may not always have access to the information necessary to accurately assess borrowers. In recent years, business owners have often found that online and fintech-based lending companies are often more likely to approve loans that banks won’t.
Thanks to technology, many of these nontraditional lenders have access to more information and data about prospective borrowers than banks do. This makes it easier for them to assess whether or not someone is a safe bet. A bank might not approve a loan simply because they’re unable to definitively ascertain if a borrower is worth the risk. An online lender can leverage data to get a clearer picture.
This means business owners who may have once struggled to access the capital they need can now obtain the necessary funds to expand their operations. Over time, this can help rejuvenate impoverished communities, where small businesses are often the primary sources of employment.
A Wider Variety of Payment Options
The easier it is for customers to buy your products or pay for your services, the more customers you’re likely to attract. That’s another reason fintech is helpful for businesses. Now companies don’t need to demand that customers pay via traditional means such as cash, check, or credit card. Instead, businesses can accept payments from mobile devices or websites, too. Some are even beginning to accept cryptocurrency.
For instance, Apple has already approved several major cryptocurrencies as acceptable forms of payment in the App Store. This allows customers who may not have been able to take full advantage of mobile apps in the past to start making purchases.
To purchase an app or make an in-app purchase, customers typically must have either a credit card or debit card. For people who are unbanked or underbanked or who prefer not to use bank accounts or credit cards for security reasons, this meant that there was essentially no way to buy these kinds of apps. Accepting cryptocurrency as payment means you can serve customers who in the past may not have been able to purchase your goods or services.
Paying Remote Employees
Thanks to the internet and mobile technology, it’s easier than ever for businesses to hire remote employees. This means you don’t need to restrict yourself to hiring candidates who happen to reside in your geographic area. Instead, you can truly hire the best person for the job, regardless of where he or she lives.
The problem is, the best person for the job may be located in a foreign country, where they use a different currency than you generally pay. Trying to make sure your freelance and remote employees are paid on time, in the currency of their choice, could be a cumbersome process.
Fintech is making this process much simpler. Thanks to companies like HyperWallet, freelance and remote employees can now easily send invoices from across the globe, indicating exactly how they would like to be paid. This allows business owners to truly attract the best talent. You won’t have an easy time hiring the best employees if you develop a reputation for not paying your remote workers efficiently. However, if your company relies on fintech solutions like these, this is less likely to be a problem.
Obviously, the points listed here represent only a select few of the many ways in which businesses and organizations can leverage fintech to their advantage. As technologies continue to improve, the list of their potential uses also expands. That’s why business owners should make a point of following the latest developments in fintech. You can’t use these tools if you don’t know they exist.