Fintech, the marriage of finance and technology, has been part of the business world for decades. In recent years, the explosion of innovation has brought even more attention to this sector. As a small business owner, you should keep tabs on the fintech industry. Here’s a few reasons why it’s so important for small business owners to follow fintech.
- Fintech tools and applications are more affordable.
As technology improves in this area, fintech tools become accessible to a wider range of business owners. For example, some fintech lenders offer white label solutions to small business owners. This allows you to offer credit to your customers in a way that may have been impossible or simply too risky to do in the past.
- Fintech services improve processes for small businesses.
Due to constant innovation, fintech companies are quickly improving many processes for small businesses. A key area where this trend is apparent is in the world of business loans. Companies offer lines of credit for small businesses, and the application process is undoubtedly easier and more streamlined than applying for a traditional loan from a bank. Rather than supplying business plans and financial forecasts, business owners simply apply by linking the online application to their online accounts, such as PayPal, that hold a host of business data.
- Fintech help facilitate the move from big data to meaningful data.
Big data has been a buzzword for the last few years, and it continues to be important. As a business owner, you have the ability to collect a lot of big data. This can include information about your shoppers, website traffic, sales and countless other data points. However, this big data is virtually useless unless you know how to use it.
Fintech companies are helping small businesses make sense of their data. Essentially, they create tools and processes that help small business owners convert big data into meaningful data. This can involve analyzing patterns, trends or links. It can also involve creating reports that help you find new insights. If you want to be competitive, you need to know what’s happening in the world of data, and more importantly, you need to understand the most effective ways to deal with data in your business.
- Fintech companies may offer services not offered by traditional companies.
It’s also important to keep tabs on the services available from fintech companies. Because of the technology and innovation explained above, these companies can often offer services that may not be available from traditional companies. It’s important to stay on top of these trends so you can make cost effective decisions for your company. For example, if a fintech company offers products or services you cannot get at your bank, you may need to take your business to the fintech company. This can apply to anything from lending to processing customer payments to making investments.
- Fintech can be a competitor in many cases.
Fintech advancements can be a huge help for many companies, but in others cases, fintech can be a competitor. When fintech serves as a competitor, it’s important to stay abreast of what’s happening in the world of fintech so you can assess how it’s going to affect your business and how you need to respond.
For example, if you are a financial adviser, a banker or a small business owner in a similar category, you may be especially interested in how fintech is affecting investments. In particular, fintech companies are create robo advisors. These electronic financial gurus are dispensing better, more accurate information than ever before. As a savvy business owner you have a few different options. You can figure out how to harness these tools and use them in your own business. Alternatively, you can identify shortcomings of the software and make sure you are providing more to your clients.