Financial technology, or fintech, while fairly new to the world of financial services, has already had a noticeable impact on the world economy. While fintech affects virtually everyone, there are some people who should pay more attention to it than others. Eventually, everyone will benefit from the improvements that technology has made to typical financial services, but for now, certain groups stand to benefit from this tech revolution more immediately than others.
For example, business owners should consider looking into how they can use fintech right now. This is true for small business owners and for leaders at major corporations. The following key reasons will tell you why:
More affordable services
Fintech startups are often most successful when they offer efficient, affordable alternatives to common essential tools and products.
Insurance is one example. Many businesses need to invest in an insurance policy once they reach a certain level of growth. However, insurance can be very expensive. Insurtech companies are changing that. Like many other types of fintech organizations, insurtech startups don’t rely on brick-and-mortar locations to the same degree that traditional firms do. This means they can save money on rent, maintenance, and all the other costs associated with physical branches. These savings allow insurtech companies to offer business insurance at much more affordable rates than their competitors.
Access to funding
As this blog has pointed out before, fintech-based lending companies offer major advantages to small businesses. In the wake of the financial crisis, many banks and other traditional lending organizations have been reluctant to approve “risky” loans. This prevents some small business owners from accessing the capital they need to grow their business.
Fintech lending companies are often more likely to approve those loans—and not because they engage in predatory lending. They simply have access to more data about a potential customer than banks do. They leverage information from a person’s digital identity to determine whether they should grant the loan.
Additionally, some startups have begun relying on fintech tools to generate their own forms of cryptocurrency. They sell their cryptocurrencies in initial offerings (the way a company would sell shares of stock) to investors who hope the cryptocurrency will rise in value. This helps new businesses generate the capital they need to grow.
Easier data tracking
For any business to succeed, it’s extremely important to monitor the company’s financial health and progress on a regular basis. This means tracking all sorts of important financial data, from monthly revenues and expenses to tax data.
This is typically easier with fintech products. Most are designed to make these kinds of records easily accessible. Fintech products can also share data with one another in many instances. This doesn’t just make life more convenient for business owners; it saves them a lot of time, helping to boost their overall efficiency. Businesses become agiler while their owners are better able to identify financial issues that need to be addressed.
More customer satisfaction
Consumers have embraced fintech products simply because they make it easier to use many key financial services. Carrying cash, for example, is inconvenient for many people. They find it’s much easier to use a product like Apple Pay that allows them to make purchases with their digital devices.
Fintech trends indicate fairly clearly that customers want businesses to offer more payment options. They’re more likely to become loyal customers if they know a company is flexible in this respect. Thus, you could easily boost brand loyalty by taking advantage of several different fintech payment tools.
Using fintech to impress customers is especially smart for new businesses. Older companies that aren’t willing to embrace the benefits that emerging technologies offer will struggle to maintain customer loyalty if they don’t adapt, while new companies that use fintech to offer customers the most efficient and convenient experience possible will stand out as forward-thinking. After all, that’s why one of the main topics of discussion throughout the fintech revolution has been the relationship between new startups and older banks. Established institutions have begun to lose customers because newer companies are more willing to embrace the digital age. Outside of the financial services industry, this principle still applies.
Of course, the specific ways in which you use fintech products will vary depending on the specific nature of your business. That said, no matter what line of work you’re in, fintech offers your business major benefits that you should already be taking advantage of. Start looking into ways your business can leverage the fintech revolution today.