5 Ways Fintech Benefits Small Businesses!

by Sean Dixon

Benefits Small Businesses

Financial Technology (FinTech) has revolutionized how corporations provide monetary services. These include reducing operational costs, simplifying transactions, and upgrading digital security. Since Fintech is a valuable resource, progressive nations like the US, UK, and China have readily adopted this new technology. These countries are the top three Fintech destinations, with the United States and China leading and the UK in the third position. In the UK, this industry comprises over 1,700 firms which may double by 2030. The sector contributes over £7 billion and more than 70,000 employment opportunities to the British economy.

Additionally, smaller companies, even those run exclusively online, can benefit significantly from Fintech. The collection of digital tools allows them to work on their business model, from improving communed experience to securing payments within seconds. As a small enterprise, thriving in commerce is necessary for your success. Therefore, here is an in-depth look into the benefits of financial technology:

1.     Access To Online Banking

Managing cash flow can be a sore subject for any organization. Much effort goes into maintaining your bank account, tracking business-related expenses, and integrating payment systems. This management tangle is why digital banking is a blessing, especially when you’re a small company. Digital banking is a process that allows you to access any banking facility you want.

If you wish to make a balance inquiry, transfer funds, or convert cash into another currency, you can efficiently perform this task over your smart device. Based on a comparative analysis of the range of services and top deals offered by various banks, Forbes identified five banks in its top digital banks UK list. The current list includes Starling, Monzo, Revolut, Cashplus Freedom, and Monese Premium as the best digital banks because of their app features, ability to integrate with other accounts and cost-effectiveness.

Not only is your money protected, but you can also invest in stocks and pay for business-related services through a point-of-sale system without needing your debit card. Additionally, these online systems can budget for you. Since your information and list of expenditure is with them, crunch the numbers and figure out the best way to ration your money.

2.     Tougher Cybersecurity

About 200,000 businesses in the UK fell victim to cybercrimes last year. Similarly, over 8% of employees in the UK opened a phishing link accidentally. As of 2022, the average cost of cybersecurity breaches is about 1,200 British pounds. For any company, this is not cheap and significantly impacts the overall budget.

Cybercriminals are evolving with time. These hacking experts are using newer and more advanced methods to access your databases resulting in widespread leaks. As a small company, details on your vendors, consumers, and partners need to stay a secret. You cannot allow their privacy to get breached and the sensitive information to fall into the wrong hands. So, Fintech helps you there. This digital resource follows certain compliance acts guaranteeing your and your consumers’ safety and security.

For instance, the data you enter gets encrypted and encoded, which is difficult to decipher. So, when your customer enters any information, it gets encrypted before it reaches you. Another financial security measure includes Role Based Access Control. This feature allows you to restrict access to each department enabling only authorized personnel to work with selective consumer data. Your manager can look into consumer account details, but your employees cannot.

Financial technology also utilizes factors like secure application logic. If a customer wants to make a transaction, the security detail will prompt a one-time unique password with every log-in before confirming any action. The password also appears on the client’s registered device, so there cannot be any third-party interference. A one-time password is also available for a few seconds before it expires, and the consumer needs to wait for new digits to pop up on their phone.

3.     Availability of Funds

Traditional banks make it difficult for smaller businesses to secure funds. You must satisfy specific prerequisites before any financial institution accepts your loan request. Larger companies can efficiently meet these demands, but most banks ignore your inconsistent actions and inconsequential expenses as a smaller company. Loan applications also require immense paperwork, which takes time to process, and the preference goes towards sizable industries.

However, Fintech is bridging this gap between small businesses and funds. The digital lending process is relatively more straightforward than traditional applications. Once you submit your request, a fintech company will check your credit and the loan you asked for and give you a response in seconds which reduces the turnaround time. So, whether you want minimal capital, need emergency funds or want to keep yourself financially stable, an online platform is all you need to get the amount you’re looking for with no hassle.

4.     Faster Payment Processing

When your business is online, customers from all over the world can check your company. It means your business has to be online all day, allowing payments to go through smoothly. You also need multiple payment processing channels such as debit cards, platforms like PayPal, and methods like Apple Pay. Fintech allows you to do this. You can use chat messages to process payments. Social media also allows consumers to make a purchase. By tapping into your company’s business page, consumers can pay online.

5.     A Dive Into Customer Experience

Customer feedback is essential for your business. You need to know if you can cater to all their needs without missing a beat. Therefore, to gauge where you stand, you need access to your consumers’ data, including their transactions, purchase frequency, and a look into their wishlists. Fintech provides you with the tools to pick up this data.

Payments and customer behavior are highly transparent through these fintech platforms. As a result, you can use this insight to develop new marketing techniques, bring in better stock, and compensate clients who had a negative experience working with your small business. For example, Fintech utilizes artificial intelligence and machine learning. Use these two tools to analyze your consumer’s purchasing habits and how often they abandon their cart and log off the website.

When you can detect areas of weakness, working on your business model to improve services becomes much more straightforward. It also helps you reduce the bounce rate and fraudulent purchases and encourage clients to complete their payments.

Final Thoughts

Financial technology is an asset for businesses all over the world. These digital tools provide short-term solutions to long-term problems for a minimal cost. As a small company, making a name for yourself in a competitive market can be grueling. However, turning to technological solutions and resources can help you accelerate the process. Fintech technology includes bank solutions that make handling your accounts convenient.

It also gives more robust data security, which is hard to intercept. Another benefit includes connecting you to funds immediately and catalyzing payments. Ultimately, your efforts pay off in a better consumer experience that you can analyze and add to your business mode

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