Fintech is driving the transformation of data-processing technology, how business is done, how products and services are conceived, and the way customers participate in the process.
What exactly is Fintech?
Fintech – financial technology – refers to businesses that leverage new technology to create better financial services.
Small businesses are crucial for economic growth and jobs, but some face difficulty in securing financing. While small and medium enterprises make up roughly three-quarters of total Australian business output, only 17.8% of business loan applications are approved by traditional lenders such as big banks, and 89% of small businesses believe credit is too hard to get.
Fintech matters to small businesses
The traditional model of securing a business loan from big banks or conventional investors is no longer the only option. Fintech is creating opportunities for Australian small businesses to access more diverse funding channels for growth. From peer-to-peer lending to crowd funding to mobile payments, small business owners have a wealth of options at their disposal.
Peer-to-peer lending, for example, can provide a loan when banks are unwilling or unable to do so. Applications for peer-to-peer lending can be completed without a physical visit to a bank branch and funds are made available in less than a week, unlike traditional bank loans that can take three or more weeks to be processed and approved.
Fintech offers a variety of tech solutions for small businesses and start ups, which provides the opportunity to gain a competitive advantage over bigger, more established companies. These options can provide a business with better visibility over cash flow, the ability to secure funding and can even improve management. They can also help small businesses improve invoicing, customer relationship management and payment systems.
What are some other benefits of Fintech?
Small businesses can now access real-time data on their consumers, providing insight on customer interests, motivations, wants and needs. Based on this data, small business owners can target customers with relevant messages and offer new products and services.
If you ship your product overseas or outsource any of your operations, you’ll understand the headaches of transferring money across borders. This is another area that Fintech is reworking. Cloud-based accounting software like QuickBooks Online has turned the traditional process of transferring money overseas into an inexpensive and simple one.
How has Fintech changed consumer behaviour?
The rise of smartphones and today’s ‘always on’ culture has drastically changed consumer behaviour. Consumers now expect to access information from anywhere, anytime. This is a huge opportunity for small businesses to flourish with the right Fintech services in place.
Mobile payments have also changed the way consumers and businesses manage money. Tablets and mobiles are the delivery system for many, but consumers still expect user-friendly and genuinely useful interactions. QuickBooks Online, for instance, offers small businesses and sole traders a chance to use this technology to manage their finances and grow their business.
Fintech is the great leveller – if big banks are Goliath, then Fintech is David.
What is the future of Fintech?
Fintech offers a world of possibilities for Australian small businesses. They can provide more services at reduced rates and even gain a competitive edge over bigger companies.
Small business owners must stay up to date with the latest Fintech developments. Doing so will not only improve the business, but also help owners stay ahead in an increasingly competitive market.
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