Small businesses are always looking for opportunities to grow and reach more potential clients. Today’s environment of easily accessed digital services allows many to take the next step in growth and services. Fintech options, in particular, have removed roadblocks to expansion by automating services that used to require significant handling and overhead. In a business environment that puts a premium on qualified employees, these technologies allow employers to put their best people in the places where their talents are most needed. From tire shops to boutique investment management firms, small businesses benefit from fintech options that streamline operations, provide services, remove human error, and reduce redundancy.
What is Fintech?
Technology that provides services enabling banking and other financial transactions is called fintech, and businesses that use technology to aid such exchanges are considered “fintech.” Experts put the value of the global fintech market at over $7 trillion, with a projected 25 percent growth rate, making it one of the fastest-growing sectors of finance. Monzo, currently the most extensive online bank with $1 billion in funding and 5 million account holders, dominates fintech banking. Digital banking has reduced traditional transaction fees and wait times for things like start-up loans, allowing small businesses faster access to funds for growth and expansion.
Examples of fintech include:
- Internet banking involves apps that allow customers access to functions such as making deposits with photographs and automating recurring payments.
- Apps that digitally accept or send payments for goods and services, like Paypal or ApplePay.
- Point-of-sale technologies such as Square and AliPay allow merchants to categorize transactions for record-keeping instantly.
- Blockchain technology provides digital security and tracking of transactions in universally exchanged cryptocurrencies like Bitcoin.
- Digital wallets allow the transfer of digital currencies without a traditional bank service and encrypt and store traditional credit card information for touchless transactions.
- Digital wealth management involves tools that allow for client self-service and, on the management side, scanning client portfolios with machine learning for more efficient service delivery.
When paired with other digital services, fintech can help to make business processes more efficient. Options like outsourced human resources and legal functions, smart pricing tools, automated multi-channel advertising, and secure e-signature instruments for essential documents are becoming more common among start-up businesses. Used intelligently and to their highest purpose, these tools can propel entrepreneurs onto the same playing field as larger companies. Potential clients may also choose the small business over larger, more traditional options if there’s a good balance between smooth interactions and good customer relations.
How Fintech Helps Small Businesses
Small businesses are always looking for an edge where they can provide services overlooked by larger companies. Frequently, this means servicing other small businesses. Hence, entrepreneurs need to extend services laterally to capture more clients and provide a depth of opportunities that retain customers for an expanded portfolio of services. This upscaling can be overwhelming for entrepreneurs. Fortunately, fintech enables small businesses to be nimble by offering digital services through software and third-party apps. These apps expand access for a more extensive customer base and automate many standard business functions.
Fintech goes far beyond using digital coins as payment, including:
- Account managementsoftware makes verifying customers more efficient, such as by linking an email lookup tool. Services are extended to clients faster with digital tools available to managers, like chatbots, self-service functions, and scans of customer accounts that automatically suggest changes.
- E-commerce tools can automate marketing and outreach to customers and leads and automate inventory functions. These allow small businesses access to provide a high volume of smaller-scale, more agile services than offered by traditional brick-and-mortar financial institutions, such as small business loans tailored for entrepreneurs.
- Efficient financial processing tools range from customer relationship management (CRM) platforms to automated inventory functions that keep in-demand items stocked. The right CRM platform also enables segmenting customers for targeted campaigns. Financial management companies use CRM tools to aid entrepreneurs’ choices of fintech functions.
- Digital identity identification has become an essential process in banking and finance as a result of the integration of technology into financial services. For instance, one of the ways that banks confirm that you are who you say you are is through identity verification. However, it is quite common nowadays to encounter fraud throughout this process, which may be easily avoided by using identity monitoring services.
- Better financial security for small companies is possible through fintech. Companies streamline services and reduce human error by implementing secure data security policies that eliminate the need for access to accounts by many different employees. Email account lookup tools can help screen potential employees to ensure that company information is handled appropriately by qualified individuals.
- Enhanced customer service goes together with automation provided by fintech tools. When a company runs smoothly with the right eCommerce fintech, the principals have more time to get feedback from valued customers and plan for future expansion or enhancements. Reducing human capital in back-office functions frees up people to respond to customer issues personally, raising the company’s customer service profile.
Fintech functions are quickly becoming the norm for small businesses looking to grow and expand (otherwise known as “scaling up”). Payroll management, inventory analysis, and expanded client services are all available through the opportunities that fintech provides. In time, these functions are becoming commonplace, and due to their efficiency, entrepreneurs are improving them to introduce enhanced features. Most customers are unaware that entrepreneurial businesses rely heavily on fintech services. Still, the explosive growth of this sector provides small businesses with so many options that it is not going away.
