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FinTech is a combination of the words ‘finance’ and ‘technology’. It denotes the numerous smart and advanced ways technology can be applied to facilitate financial services to solve the several issues facing financial institutes on the globe. FinTech exists alongside the traditional financial system and it forces financial firms to upgrade from their old-fashioned business models by pivoting to more practicable and efficient solutions.
Some of the solutions that FinTech provides to the finance industry include mobile wallets, peer to peer funding, online payments, online trading of securities and instruments, and so many more. Through the ease of gathering user data and noticing trends in the market, small and medium businesses alike can get to compete with large organizations in the market.
FinTech can serve to facilitate your business and ultimately boost your profits in several ways. They are listed below.
1. Getting a Business LoanSome years back, it was harder to get a loan from financial institutions to fund your business startup. The typical way of sourcing for business loans was to get to a bank or meet up with potential investors to get a loan on interest. The number of funds that could be loaned were based on several factors like the ability of the lender to lend, customer growth of the firm, and trends in the industry.
Several small and medium businesses get turned down back then because most financial institutions and investors had no interest in what they deemed mini-returns from small businesses. FinTech has made it possible for small businesses to get loans at their fingertips due to the numerous lending platforms that have sprung up in the past decade. This way, small business owners can get their desired loans and lenders can gain interest on their loans.
2. The Ease of PaymentsIt’s been said that the easier it is to make a payment, the faster money leaves one’s pockets. With the introduction of online payments, ordering goods and services online has been made the way easier. FinTech has also provided a system that facilitates the ease of noting one’s credits and debts. This way, a firm can make faster business decisions to avoid making losses and boosting profits in the long run.
Also, in the past, making financial transactions with companies in other countries was difficult, expensive and quite stressful. The introduction of FinTech has molded the world into one small global financial village. This way, your firm can easily collect payments from clients it has rendered services to and make payments to suppliers for goods received or services given. It is key to remind clients of the importance of using a VPN while conducting mobile transactions (privacy and security made possible by traffic encryption)
3. Provision of Management ToolsThe myriad of management tools that FinTech provides help to make your team determine if the expenses of the firm need to be increased or reduced and sort out the sectors where the firm needs to improve on. There are accounting systems that are online 24/7, helping businesses monitor the flow of cash into and out of the organization.
Several applications with these accounting systems are either free or super-cheap and help automate cash flow thus making it easy for you, the business owner to concentrate on prominent matters concerning the company.
4. Financial Instruction ChatbotsChatbots are highly used in the finance industry to reorganize a flow of customer interaction. The introduction of chatbots has helped customer service agents focus more on issues of greater importance. Another benefit of chatbots is the speed at which replies are composed and solutions are provided to clients. It also serves to automate the collection of data.
Chatbots are always available to provide answers to the questions raised by customers. They help to provide information to queries in a matter of seconds, thereby ensuring that a wide range of your customers is satisfied.
FinTech is the present and the future of the financial services industry. Its emergence has simplified a lot of processes, making it easier for businesses to hit the ground running, widening customer reach for small businesses through the analysis of trends and monitoring of cash flow. Practically, FinTech has facilitated a better user experience for your customers and thus, a better chance of making a revenue for your business.
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