The best ways small businesses can take advantage of Fintech opportunities
Companies have become increasingly digital in the last couple of years. At the onset of the global pandemic, many business owners quickly realized the value of using fully integrated digital systems.
As businesses grow, so does the technology that helps fuel their expansion.
But again, the narrative here speaks for itself. The more businesses need the right set of digital tools to help them stay relevant in a highly competitive market; the faster certain technologies will be developed to help cope with the growing demand.
One specific category of technological tools that has really captivated and helped advance how businesses interact and connect with their customers is financial technology or fintech.
Experts have found that fintech now encompasses more than the traditional applications and products it was originally designed for.
Fintech has become a key player in the overall success of small b-companies against the background of an increasingly competitive marketplace and how they can organize their finances in a successful way.
In a Forbes Advisor article, journalists covering the topic suggest that fintech refers to “platforms that enable day-to-day tasks such as depositing checks, moving money between accounts, paying bills or applying for financial aid. However, they also facilitate technically complex concepts, including peer-to-peer lending and crypto exchanges.”
Tools and apps help improve the digital financial experience
Today, it is clear how these tools and applications have helped improve the digital financial experience for billions of consumers. And research shows how quickly fintech has been adopted across consumer markets.
In 2019, around 64% of the global population used fintech applications, according to a report by Ernst & Young Global FinTech Adoption Index. The same report found that back in 2015, approximately 16% of global consumers were using fintech-based technologies. Today, 3 out of 4 consumers use digital money and online payment solutions.
With the growing digital population, and the developing world rapidly online in droves, fintech will help catapult both consumers and small businesses into the next generation of technology and digital mobility.
Slow digital adoption
Despite the positive growth the fintech industry has experienced over the past couple of years, mainly during the height of the pandemic, research from the Center for Financial Inclusion showed that some small businesses have been slow to transition to digital.
In countries such as India, Indonesia and Nigeria, SMEs have been slow to adopt important digital and fintech tools. In some countries, such as India, there has even been a decline in recent years towards digital adoption.
Are you educated enough to see the wide range of technologies in fintech?
The problem with the slower adoption of fintech and other technology-related products or services is that small business owners are not aware or educated enough about the potential these technologies can bring to their businesses.
In addition, many small business owners fail to implement the right set of tools due to a lack of digital skills or financial challenges that limit them.
While there is evidence that some small businesses have been actively working to improve the usability and usability of fintech tools, there is still a lot business owners need to learn when it comes to how these tools work and how much of a facet they can become. for their business.
Fintech as an inclusive industry for growth
As more and more people come online, whether through mobile devices, or the transition to the virtual workplace, small businesses will need to start looking at ways to tap deeper into the pockets of financial technology.
There are many ways to improve and enhance business activities, simply by looking at technology and software to find the answer.
Although not an easy task, as not all small businesses are in the same financial position to choose high-tech payment and banking tools, owners and entrepreneurs should remain open to the growing market of opportunities that await them.
Going forward, there will continue to be an enormous amount of challenges that small and medium-sized business owners face outside of their traditional operational problems.
The fast pace of the digital economy needs resources to take off
The digital economy is only beginning to take off, but at a rapid pace, and unfortunately those with limited access to resources and related tools will be left behind. It is therefore important for the industry – fintech – to look towards expanding its efforts to become more inclusive in financial and social dynamics.
For small business owners, it’s important to look at ways they can create more opportunities for improvement, both in their businesses and for those just now learning to adapt.
Through a more community-driven approach, it is possible that small business owners, regardless of their level of digital literacy, or access to advanced fintech tools, will learn new ways to become more resilient in the face of financial uncertainty and find technological tools that can help protect small companies.
Take advantage of the opportunities fintech offers
To gain a better understanding of the financial pyramid, which sees a number of consumers and small business owners at their base adopting digital payment tools, let’s take a closer look at how small and medium-sized businesses can begin to take advantage of these opportunities.
Digital payments
Digital payments are perhaps one of the most essential and biggest buckets caught under the fintech umbrella. Research by the World Bank found that roughly two-thirds of adults now make or receive digital payments. Moreover, in the last couple of years, digital payments have become the best for many consumers, both for sending and receiving payments.
For small businesses, accepting digital payments puts them in a position to serve more customers, both in-store and online, through digital payment options. As a result, digital payments have become a safer and more suitable substitute for many small businesses looking to expand their customer base but also pivot to the future of successful business innovation.
Beyond is the notion of how digital payments have helped increase efficiency among team members and help reduce the digital gap between the consumer and the business.
Digital lending
On the opposite side of digital payments is the captivating innovation of digital lending. While the concept is still somewhat new in terms of what it is and how it will work, some businesses, more so those in the financial sector, have already seen significant growth in consumer usability for digital lending.
Digital lending can help speed up the process, help banks make more accurate decisions, and help both parties seamlessly collect and compile information or data faster.
Between March 2020 and the end of 2021, commercial banks in the US saw a 34% increase in corporate deposits due to the ongoing pandemic at the time. What this means for businesses, both small and enterprise-sized, is that the lending and borrowing process becomes more streamlined and less complicated overall.
Wealthtech
Wealtech is a category visited by individuals and small businesses looking for simplified and practical ways to help them manage their money and savings.
Perhaps the most common feature of wealtech is robo-advisors, which in recent years have become a significant player in the world of public market investing and trading. Everything is part of the simple tasks that companies can now fully automate using technology, the internet and other software-based tools.
In addition, wealth technology is branching out into the world of small and medium-sized enterprises (SMEs) to help business owners better control their cash flows and help build a safety net for savings in the event of a sudden economic downturn.
This could mean that wealth technology tools and platforms can help business owners generate more micro-investments and build their understanding of digital brokerage applications. Digital wealtech has not yet been fully explored by companies or their owners, but it has the potential to become an important facet of business in the coming years.
Digital capital raising
For business owners taking a step towards expansion, digital fundraising has become the best way to help distribute your business to potential investors and stakeholders.
Transformative digital tools have now enabled many business owners to become more connected to investors. Digital fundraising has many benefits and there are different ways business owners can take advantage of the opportunities to grow their business.
Today, business owners can share insightful information with investors faster and more seamlessly. Financial contributions can be in the form of fiat currencies or digital currencies through the use of the blockchain. In addition, rewards and interests can now be transferred to customers and investors via the internet or digital platforms.
Whatever it may be, the growth potential is not only limited to a few electronic services, but also to how it can become a financial resource for the business. As a result, digital fundraising can become part of the broader business map that can help business owners find an appropriate path for their business.
Digital custody
Companies and organizations often have to deal with a number of legal and custody regulations relating to the ownership of financial assets held in the business. And while all of these regulations are debatable, the need for more digital custody may be the key driver to help businesses unlock the potential of the digital economy.
Although there are many different branches of digital custody, it is often closely related to the ownership of traditional financial assets, where a custodian will take responsibility for securing the investors’ assets.
For small businesses, digital custody can mean that financial assets can be transferred between owners, investors or stakeholders. It also helps make these financial assets more accessible by helping business owners tap into the growing cryptocurrency market.
Digital storage comes with its own challenges and will need to be explored further in the coming years. Despite the burdens, however, digital custody has already proven to be a valuable asset for many business owners.
Final thoughts
Although fintech encompasses a wide range of categories, the growing need for digital innovation in the financial sector has only meant that small businesses can now benefit from the most important facets that fintech brings.
As the world becomes increasingly digital, business owners will help find that fintech solutions are not only an advanced option, but also a financially sustainable solution for their businesses and their customers.
There is a lot business owners can do to improve the experience and help those who have limited access to the right tools and resources. However, some of these challenges may require business owners to look towards a more community-driven approach to reduce high levels of digital illiteracy among owners, entrepreneurs and consumers.
The bottom line is that businesses need financial technology not only from an operational point of view, but also in terms of how the business can grow, expand and play a key role in its marketplace.
Featured Image Credit: Photo by RODNAE Productions; Pexels; Thank you!
