Technology has come a long way in the last few decades, and has now stormed into the world of finance. As such, fintech is an incredibly important topic for businesses worldwide, as it is changing the way they operate and, in many cases, making business operations cheaper.
SMEs can particularly benefit from various fintech developments, as they are the most at risk from funding issues and expenses. Here are some of the ways fintech is revolutionising business for SMEs.
When businesses invoice their customers, there is usually a lengthy wait of between 30-120 days before they actually receive payment. This can be incredibly frustrating for SMEs, who need the cash to keep business operations flowing as well as the business growing.
Companies like Touch Financial offer to help with invoicing issues through offering an invoice finance service, which allows the business to receive most of the value of the invoice through an upfront payment (minus the lender’s fee). This is done through innovative online platforms, which are incredibly easy to access and often allow the business to receive the lender’s payment within 24 hours.
Fintech is also disrupting the world of traditional banking, mainly in terms of borrowing and lending. It is now becoming increasingly common for people to pay for shopping with their mobile device, and use banks which exist solely online rather than on the high street. This makes life far easier for SMEs as it cuts out onerous waiting times and often works out cheaper than traditional banking alternatives.
Even banking apps like Monzo are greatly appealing to SMEs, as they simplify and improve the banking process. There is no doubt that traditional banks will have to change their game as fintech continues to grow and offer better options for business owners.
The creator of bitcoin, Satoshi Nakamoto, is also famed for creating the revolutionary technology which underpinned the cryptocurrency. Blockchain is swiftly becoming one of the most significant technological developments of the 21st century, and it is likely that many fintech developers will take advantage of its genius.
It is completely decentralised and almost hack-proof, meaning it offers an unparalleled level of security to those using it, and may be used for numerous digital operations in the future, such as cloud storage.
Cheap Yet Effective Solutions
Fintech undoubtedly offers some of the most revolutionary means of making business operations cheaper and more effective. The solutions if offers to many of the problems faced by SMEs (such as stunted cash flow and insufficient funding), are paving the way for greater accessibility and funding options for entrepreneurs.
Fintech will continue to grow and change many of the established, outdated financial systems that are currently in place, and will ensure that there is always a more modern-day solution to financial problems.
As fintech successes continue to come in, an increasing number of entrepreneurs are likely to become interested in the advantages it could offer their own business/business plan, and investment in fintech solutions will likely increase, further incentivising the development of more fintech solutions.