Financial technology, or FinTech, has transformed the world as we know it. Besides being a valuable tool for consumers, FinTech has changed how modern organizations conduct business. This technology has been beneficial for small businesses, and it has provided many companies with opportunities previously unavailable to them.
Most of the benefits associated with FinTech revolve around automation and expanded access to credit and services. Businesses of all sizes can benefit from FinTech. Still, small businesses, in particular, can take advantage of the capabilities offered by financial technology to level the playing field with their larger competitors.
Let’s take a closer look at how FinTech can benefit businesses of all sizes.
1. Expanded Access to Funding
Table of Contents
Securing funding for business ventures has always been a priority and concern for organizations, especially small businesses. Unfortunately, traditional business loans have not always been easy to come by for small businesses. However, FinTech innovations have changed this. As a result, more companies than ever before can access necessary funding that allows them to scale, increase their product or service offerings, and so much more.
Additionally, FinTech saves businesses time. For example, in the past, a business owner would need to go to a bank or credit union and go through a lengthy loan application process. At the end of this process, there was no guarantee that a business would qualify for a loan. In fact, many companies would be denied. FinTech has helped change this in more ways than one.
First, the application process is a lot simpler and faster. In addition, FinTech gives alternative lenders more opportunities to participate in lending. In turn, this creates more available lenders for businesses to get a loan from. Thus, providing businesses with more potential capital.
2. Automating Financial Tasks
Financial tasks like accounting can be time-consuming, but with FinTech, these once laborious tasks can be automated. Plus, financial technology solutions offer a higher degree of accuracy than human accountants. If your organization has ever dealt with the IRS or business litigation, will understand how vital accurate bookkeeping is. Even the smallest errors could potentially have significant consequences.
Plus, automation can help your business save resources like time and money that can be invested in other facets of your operations. Automation doesn’t stop with accounting. With FinTech, you can automate other tasks like paying your B2B marketing partner or running payroll. If your business works with a lot of vendors and outside businesses, FinTech solutions drastically simplify paying them and keeping track of your spending.
3. Online Payments
Any discussion about the benefits of FinTech that failed to mention online payments would be incomplete. Even though online payments are commonplace today, at one time, small businesses were restricted in the types of payments they could accept. Thanks to FinTech solutions like Square, small businesses, individuals, and independent artisans can process credit and debit card payments all from their smartphones.
Online payments have enabled eCommerce businesses to expand their reach beyond the borders of their home country and sell to customers all over the world. The ability to process payments online has changed the world and expanded opportunities for businesses of all sizes.
4. Retirement Plans
Retirement plans are one of the most attractive benefits offered to employees by their employers. Unfortunately, this is a harsh reality for many small businesses because often, they cannot afford to compete with the benefits packages offered by larger companies. As a result, small businesses might struggle to recruit and retain the top talent in their industry.
FinTech solutions have been created to address this issue and expand the capabilities of smaller organizations to offer competitive retirement benefits to their employees. New FinTech product offerings from companies like Ubiquity and Betterment make retirement plans cheaper and easier to administer for small businesses.
There are several different FinTech solutions on the market. Many of these solutions are tailored to address specific needs, so it is important to thoroughly research available products and understand your unique requirements before you choose one. If you are a small business, FinTech can help you level the playing field with your larger competitors and simplify your financial processes.