Entrepreneurs and business owners are passionate about the goods and services they offer customers and often have busy schedules. Fintech may not be on their radar, but it should be. Fintech, a combination of finance and technology, smoothes transactions and supports business finances from which many companies can benefit.
The good news is that learning about business finances and financial technology isn’t challenging or time-consuming. Consider this information Fintech 101 for your company or startup.
What is fintech?
Fintech is a broad term that covers technology created to improve or automate traditional forms of finance, money management, and financial transactions. This financial technology is a help to businesses as well as the customers and clients they serve.
Fintech trends you need to know
For business owners, financial technology facilitates transactions, signing contracts, insuring their companies, and more. Knowing how to take advantage of the savings and speed these fintech trends offer will help small businesses thrive and successfully compete with much larger companies.
Learning about fintech is the first step to using this technology to make doing business easier, safer, and more cost-effective. Here are some fintech trends driving companies into the future through technology.
Fintech and online platforms can help business owners and entrepreneurs learn more about business operations and how fintech can be a part of them. Fintech can help find the right processes that lead to improved performance and higher profits.
Budgeting with fintech
Fintech tools can help startups and small businesses handle budgeting. This financial tool, available in software and mobile apps, uses real-time data from banks to give and assists owners in managing cash flow, setting spending limits, and optimizing finances and expenses.
Fintech developments like blockchain simplify payments and bring greater speed and lower costs to peer-to-peer exchanges. As a result, financial transactions between small businesses and their customers are faster, secure, and less expensive for business owners. Other examples of fintech usage include online banking, online e-commerce purchases, and donating to funding platforms.
One of the fastest-growing areas of fintech is insurtech, which allows entrepreneurs to get the business insurance they need quickly and affordably. The ease of covering property, equipment, and essential employees through insurtech has challenged traditional insurance firms to insure property, businesses, and more.
The open banking trend means banks can allow third-party companies to build applications or offer services using the bank’s data. This will enable startups to develop new mobile apps for financial services.
Application Programming Interfaces, or APIs, allow banking to be done quickly and easily through apps or online. APIs allow apps and banks to communicate, making business transactions possible. Application programming interfaces make doing business quicker, easier, and safer for consumers and companies.
Whether your small business needs startup funds or is acting as a lender or contracting with clients or renters, having e-signature capabilities is essential for fintech. E-signature technology allows documents to be signed and sent around the world or the block.
Fintech has entered the world of point-of-sale payments, and plenty of POS systems are on the market. Restaurants, coffee shops, and bars can benefit from POS, from ordering to accepting payments, with systems even showing business owners when to replenish their inventory. Likewise, a simple Square app can help a traveling hair stylist take payments anywhere there’s WiFi.
Regulatory technology, or regtech, helps businesses of all sizes comply with regulations for transparency. Regtech also allows companies to reduce risks to cybersecurity and data privacy. Data reports can be automated with regtech tools, saving businesses time and money and reducing the number of employees needed.
Data is an integral part of financial services and financial technology. For example, managing risk, identifying fraud, and ensuring compliance depends on data analytics. Previously, data analysis was a massive undertaking, but now fintech tools can help keep small businesses with data analytics in real-time.
Automated investment advice
Investment advisors can integrate fintech through tools that dispense automatic investment advice, also known as Robo-advisors. Adding this to a company website gives an advisory business a high-tech look and will interest potential clients.
Several Fintech companies, such as Centrify and Riskified, offer identity verification and fraud protection to other businesses and their customers. Through machine learning and data analysis, these companies help prevent fraud and enforce safety protocols when companies process payments, open new customer accounts, validate customers, and more.
The bottom line
Fintech is an essential component of all business sectors today.
By learning financial management, business operations, and fintech tools, business owners facilitate all business processes from payments to fraud protection. And with the help of fintech mobile apps and software, business owners will always have their businesses’ financial information at their fingertips.