6 Compelling Reasons Every Organization Should Leverage FinTech
by Sumona Finance 14 December 2021
Nowadays, FinTech has become a buzzword. You might have heard of it around the business sphere, in tech hubs, or on social media. However, if you haven’t yet, FinTech – financial technology is any piece of technology that intends to improve financial operations. Among the best examples of fintech are digital banks or neobanks (you can find good reviews of these banks in Bankopedia), blockchain, and mobile payments. It automates repetitive tasks such as bookkeeping, payroll, etc., to streamline the financial processes.
After the financial crisis led by the global pandemic, businesses are looking for a fresh start in 2022. And fortunately, FinTech can provide organizations the momentum they need to kick off on the right foot. Whether you want to upscale money-related matters or expand the company, the right FinTech tools will prove advantageous. They will allow you to analyze various financing options, ensuring you pick the one with minimal interest rates to have a cost-effective expansion.
Moreover, FinTech can facilitate day-to-day tasks such as preparing budgets and financial statements, reducing workloads. It also eliminates the likelihood of errors and mistakes, promoting seamless financial management. If you are still uncertain about this, have a look below. Here we are highlighting six compelling reasons why every organization should leverage FinTech.
1. Promotes Financial Inclusion
For most people, cash and credit cards were the only mode of payment. But as we step into a more digitized world, everyone should take advantage of modern-day financial services. Luckily, FinTech provides access to standard financial services such as mobile money and e-wallets, creating a more financially inclusive world. In addition, it facilitates cryptocurrency, introducing a new mode of payment for people.
Organizations can leverage such multiple payment gateways and facilitate people to carry out transactions with ease. However, incorporating FinTech and automating your accounting processes is a challenging task that requires finance and accounting experts’ intervention.
Companies should look for individuals possessing online Master of Accountancy academic credentials given their exceptional skillset and expertise. These individuals combine their online education with industry exposure to remain abreast of changing accounting practices and financial trends.
2. Offers Better Financing Opportunities
Another area FinTech has dramatically impacted is the business lending sphere. Previously, businesses had to find traditional lenders such as national and community banks. Even though bank loans seem convenient, they have stringent requirements, making it impossible to qualify for a loan. Today, there are various ways businesses can receive funding outside of banks – all thanks to the evolution of FinTech.
Now, companies can borrow money from online lenders. They offer better approval chances than traditional lenders and proceed with funds the same day. Further, FinTech has also promoted the growth of crowdfunding platforms.
It allows you to borrow from the public in exchange for gifts, discount vouchers, or a small share of ownership in the business. You only have to share your business model with the public, and everyone who has the same set of values will pinch a few pennies.
3. Facilitates Smart Business Banking
Today, going to the bank has become a thing of the past because of the evolution of banking technology. People can open a bank account online by tapping on their mobile phone screens. Likewise, entrepreneurs can sign up for a corporate bank account with virtual and physical cards. Besides this, digital banking allows people to apply for loans online. Whether you want funds to buy equipment or plant – a loan can get processed online.
Moreover, FinTech banking tools allow managers to track employees’ corporate credit card usage online. It promotes financial tracking and responsibility while reducing the likelihood of fraud. Business owners can also integrate the accounting forums and ERP solutions with banking platforms to track transactions and monitor spending.
4. Enhances the Budgeting Process
Although every business forecasts budgetary requirements, they operate too close to breakeven. It means a slight decline in revenue can drown the entire company into losses. Hence, it is crucial to have enough cash reserves and accurate budgets to make it through economic disruptions.
Here, technology can come to your rescue. FinTech’s cloud-based intelligent planning platforms can budget the entire year’s financials more accurately. The forum will put together your company’s financial information – sales, assets, liabilities, expenses, etc. in one place. Therefore, making it easier to forecast, plan, and report your business finances.
Similarly, FinTech offers real-time scenario management tools. It gives complete access to financial dashboards, allowing you to create a driver-based budget. In addition to improving financial health, speed would be another benefit of integrating FinTech. You can prepare budgets within a few minutes and update them with evolving circumstances.
5. Empowers Small Businesses
Unsurprisingly, large businesses always had the upper hand when it came to using financial tools and technology. Fast forward to 2022; this isn’t the case anymore. Today, even sole proprietors can use tech-savvy tools and software. FinTech offers free of cost payment processing tools through which small businesses can manage the accounting flows. Similarly, various expense tracking tools are available, allowing small businesses to keep a check-in balance on costs.
Furthermore, small businesses are no longer confined to accepting only certain types of payment methods. FinTech enables them to process electronic payments like other industry giants. In addition, inexpensive e-Commerce sites allow them to open up their wares to the world. For instance, you can sell items via Facebook and accept credit cards for as little as $9 per month through Shopify.
6. Provides Greater Liquidity & Flexibility
Despite making profits, many companies suffer from liquidity problems. FinTech offers an easy solution through online factoring that provides flexible ways of keeping the cash flow. The digital mechanism makes it convenient to collect payments within a short time frame. It sends reminders to customers and imposes penalties on late payments. In addition, it can discount the prices at a future date, accounting for the time value of money.
FinTech tools can forecast and predict future demand. The analytical software monitors spending patterns, giving you a fair idea of customers’ evolving tastes and preferences. Following that, you can streamline the inventory levels. It will ensure your cash isn’t tied up in the stock, saving your company from a liquidity crunch.
Truthfully, FinTech is becoming a driving force behind the development of the business industry. It promotes financial inclusion, streamlines business operations, and provides greater flexibility. In addition, savvy FinTech tools also help companies cut back on costs. The automation of workflows speeds up financial operations while reducing overheads. Therefore, every business should reap the benefits of FinTech and upscale financial processes.