Fintech Changing World of Finance

Fintech Changing World of Finance

FinTech changing world of finance from traditional banking is ripe for disruption and we’re finally starting to see that play out.  The FinTech industry has taken aim at the status quo. They are showing us that with some fresh thinking and new technology, the financial system can be significantly improved.

FinTech’s core idea is making financial services more accessible, approachable, and efficient.  We’ve seen this accelerated recently as the global pandemic has forced consumers to rethink how they engage with financial service providers. Instead of going into a branch, customers are moving to online channels, mobile apps, and other new forms of customer interaction.

For small businesses, these new forms of finance are exciting new avenues to support their growth and scale.  For those who can adapt to the new normal, they’ll find that this technology acts as a key leverage point for long-term growth.

“Australia can be a leader in digital assets. This means Australians can access new choices and lower prices. It means Australians can have more control of their financial destiny rather than being dependent on endless intermediation,” said committee chair, Senator Andrew Bragg, on occasion of the report’s unveiling in October 2021.

In this vein, let’s look at FinTech changing world of finance trends that should catch all small business owners attention.

FinTech solutions are no longer mere gimmicks.  They are becoming the most important force in the financial system as a whole.

How is FinTech Changing World of Finance

They will transform the way businesses operate as the new normal has embraced new customer and safety behaviors across all industries.

Augmented Reality

Mobile Technology

AI-infused CRM

Artificial Intelligence

5G Technology

Omnichannel Shopping

Fintech Changing Finance - Accrutus Capital
in 2021, AI (Artificial Intelligence) remains the top tech trends. To be incorporated into new and exciting processes and solutions like voice assistants and chatbots.

FinTech changing world of finance
Fintech changing world of finance by helping small businesses save time and money, through automating manual task.

In 2021-22 it is predicted that most of the company’s budget will be spent on automation of services, delivery and marketing.

FinTech alternative lenders

7 FinTech Trends that are Changing the World

1.  The Rise of Alternative Lending

In years past, small businesses were forced to beg and plead with banks to access the financing that they needed to grow.  Getting a bank loan remains a very difficult proposition for a company that cannot meet the stringent requirements set by the banks.

FinTech changing world of finance lenders have sprung up in their droves to help here, offering more flexible, efficient, and timely financing options for small businesses of all kinds.  In today’s world, you aren’t limited to just a few banks.  You actually have a wide variety of different options that you can select from – depending on your circumstances and your needs.

These could include working capital finance, trade finance, invoice finance, SME bonds, and so much more.  Each of these new product verticals offers a fresh take on fundraising in a way that works for you.

2.  Mobile Payment Options

Another area of FinTech that has boomed in popularity is the world of mobile payments.  Culturally, consumers are becoming much more comfortable with using their phone or e-wallet to make payments.  And small businesses that can enable these payment methods will benefit from this change in consumer behaviour.

The payments of the future will be vast and diverse, allowing each consumer to choose what works for them.  This only bodes well for small businesses that want to reduce as much friction as possible for their customers.

The more payment options you can offer, the more customers you’ll be able to serve.

3.  Advanced Analytics

Thanks to advancements in data science and machine learning, companies of all sizes are getting a better grasp on their data and what it can do for them.  The ability to derive key insights from customer data and link them to purchasing behaviour creates a treasure trove of information.  All of which can improve overall decision-making and transform your business for the better.

This will continue to improve over time and small businesses who get into this early will have a major advantage over those who don’t.

4.  Short-Term Business Finance

By removing a lot of the friction in the financial system, FinTech changing world of finance providers are able to offer short-term finance options that just aren’t possible with traditional providers.  Sometimes all a small business needs is a small bridging facility or working capital finance to get them through a temporary cash crunch.

FinTech allows them that opportunity without locking them into onerous contracts or long-term financing that they don’t need.  This flexibility is worth its weight in gold.

5.  Alternative Credit Models

FinTech providers have worked hard to develop products that can get around a lot of the red tape that exists in lending.  We’ve seen new credit models emerge that look at metrics and performance indicators that are specifically suited for small businesses.  These lenders understand the struggles of running a small business and have crafted solutions specifically designed for those companies.

This is a big step forward in getting small businesses the support they need to survive the early years and grow into larger companies that can make a difference in their respective industries.

6.  Crowdfunding

FinTech changing world of finance through the rise of crowdfunding is another key development and the new way to raise capital.  Whether it’s for a specific product or for an entire company’s equity, crowdfunding platforms offer an unique mechanism for fundraising.  It can be used to assess early demand and bring a large group of people along for the journey.  Instead of relying upon one key provider to fund the whole thing, the risk is widely diversified.  It allows for much more natural interaction between investors and their investees.

Small businesses can use this to their advantage to raise the funding they need while also building a community of stakeholders that care about what they’re doing.  Not to mention the vested interest they have in their success.

7.  Automation

The last trend we’ll look at here is automation.  FinTech changing world of finance enables a wide range of opportunities for small businesses to automate a number of their routines, and procedural financial tasks.  These tasks would previously have taken up a lot of time and resources.  By handing these off to intelligent systems, these businesses can deploy that energy to other higher-value tasks.

These FinTech systems can run 24/7 in the background, without any human intervention, and it opens up the doors for customers whenever they want to engage with your offering.  It also liberates your staff from tedious work and allows them to spend more time on the things that really matter.

How These Trends Can Benefit Your Small Business

FinTech changing world of finance is important to look at some of the overarching patterns that can prove very valuable for any small business.

  • Speed. Instead of waiting weeks for a bank to come back to you, you can access funding quickly and efficiently through FinTech solutions.  Every minute you save here is crucial for keeping your business ticking along and it allows you to be much more agile as an organization.  Time is money, as they say.
  • Lower Costs. Because FinTech providers aren’t saddled with the infrastructure and legacy systems of banks, they can greatly reduce the cost of funding.  As a result, you can maintain strong margins and operating leverage while still paying back your loans.  This alone can be a game-changer for your company.
  • Less Paperwork. This might sound trivial but every moment spent on administrative tasks is time that isn’t being spent on growing your business.  FinTech providers who can eliminate a lot of the paperwork allow you to efficiently access finance without any roadblocks or bottlenecks.
  • More Flexibility. FinTech offers financial services that suit your specific needs so that you’re only using what you need when you need it.  You can craft your financial future as a result and tie your lending behaviour directly to the performance of your company.  Flexibility gives you options and that’s invaluable in the early years when you’re still looking for traction and scale.

All of these pillars represent significant improvements on the current financing options available to small businesses.  By leveraging each of these benefits, you can get on the front foot when it comes to your financial situation, making it that much easier to grow and prosper. Australian FinTech’s are now internationally competitive, according to 80 per cent of respondents, up from 64 per cent in 2019.

We will embrace FinTech changing world of finance, for 2021 and beyond, because there is not turning back.

Our Role at Accrutus Capital

Here at Accrutus Capital, we’re passionate about helping small businesses access these opportunities and walking with them as they transform their organizations.  These trends are not just a 2021 fad, they are here to stay.  And we are doing all we can to create the sorts of products and services that can be the catalyst for that.

If you’re looking for alternative small business finance, working capital finance, unsecured business loans, or a range of other solutions we’re here to help.  Get in contact today and let’s work together to bring your company into this exciting new world of FinTech.

Accrutus Capital is committed to increasing the awareness of fintech changing of world finance to facilitate multiple debt and equity options. These fast non-bank solutions boost cash flow when you need it most, saving you time and money.
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Call us today at 02 9006 1327 and speak to our alternative finance specialist. Together we will devise a plan to help boost your business growth with fast working capital finance.

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The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.

Small Business and the Fintech Revolution

Small Business and the Fintech Revolution

Small businesses create jobs and drive the economy. To enable this business needs fast access to funding. The fintech innovations developed over the past few years have made huge advancements toward this.
Most small business owners are time-challenged and technology has allowed us to shop online, find businesses, instantly market to consumers. Gather intelligence, and communicate with everyone instantly. Technology has enabled borrowers to access loans quickly from a broad range of funding options bypassing the traditional bank. 

Millennial Customers

Mobile payments must be simple and at millennial’s fingertips as the overwhelming majority use their smart phones as mobile banking. Princeton Survey Research Associates International reports 67% of Millennial’s do not have a credit card as of 2016.
Savvy business owner of today must offer mobile payment options and embrace fintech for future viability. Customers want goods and services quickly, simply and accessible everywhere 24/7 in today’s technology world.

Fintech apps open up a whole new dimension for entrepreneurs which can take your unique small business to the very next level. These mind-blowing tools could assist effectively in managing your books, getting paid faster and interacting with your customers and employers. Thereby this financial revolution gives you great tools to streamline your financial operations.

Top 8 Fintech tools for Small Business

  1. Zenefits – this app is known for automating your processes for you to understand the situation. Zenefits is equipped to handle both payroll and benefits
  2. Gusto – is a versatile tool and helps to automate workers’ compensation and taxes. All employees get their remuneration package on time every month
  3. Guideline – helps you to effectively manage your plan for your employees’ benefit. Automated enrolment specifically for your employees when they are qualified for the plan.
  4. Expensify – its known to be an excellent Fintech tool for small business as it would allow all your employees to go ahead and submit their expenses for reimbursement
  5. Emburse – the best feature of Emburse is that it could generate virtual credit cards that could be used by your respective teams. Assign each specific small business unit one card that could be used by everyone belonging to the group.
  6. Xero – a reputed cloud accounting organization that is dominating the global market today for its array of start-up accounting apps. Its best for cloud computing and you could be easily getting live access to all your vital financial information. Such as bank feeds, turnover, cash flow, debtors, and more from all corners of the universe.
  7. Spotlight – very popular for reporting, as well as, KPI management. A robust dashboard tool which could be set up for tracking and enhancing key metrics. Impress your business investors with striking reports such as KPI’s responsible for growth and progress.
  8. Due – is certainly the best choice for managing invoice and payments. The app could accept a broad spectrum of payments and a digital wallet to manage your payment forms. Can deposit money in your precise bank account if you so desire. Recurring invoices are an option as well then wait for your money to come in.

Is Fintech the new gold rush investment?

The fintech industry has matured significantly since 2010 and is touted as the new gold rush for investors. Thereby, growing from 10% in 2016, to a staggering $23.2 billion, with China and USA leading the market. The future of banking industry will be heavily influenced by emerging fintech companies and artificial intelligence technology applications. Consequently, setting the stage for increasing competitiveness. Small business and consumers are the winners as innovations in finance and technology compete for your business.

If your business is still not utilizing these powerful fintech tools, your are really missing out on golden opportunities. Effective tools are available for practically all aspects of your small business. Accrutus Capital is an alternative finance provider offering unsecured business loans and working capital finance for Australian businesses.

 
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How Fintech is changing Small Business

Banks continue to reduce their lending activities to SME’s which are one of the main drivers of the fintech revolution. The huge financing need remains, and there lies the massive opportunity to disrupt this sector. Global banking systems are guided by the Basel III framework and consecutive Basel IV response which is the central element of the Basel Committee’s response to the global financial crisis. It addresses shortcomings of the pre-crisis regulatory framework and provides a regulatory foundation for a resilient banking system that supports the real economy.

What is Fintech?

Innovative technologies created by start-up companies that develop the digital platforms and apps designed to disrupt existing established financial systems. Fintech offers new alternative financial products accessed online delivering a faster and mostly cheaper service. The ever-evolving landscape of the financial technology sector covers a wide variety of technologies, customers and services.

Small businesses have seen the change particularly the simplicity and speed in which fintech has delivered services over the internet. Online platforms offer big data computing, and mobile connectivity. Companies are now able to buy in to complex, feature rich financial software programs and technical services were unattainable for most small business.

Social platforms, business news channels with real-time updates and the insights of big data have provided SME’s with unparalleled business insights. Smart operators can now stay ahead of the game, while offering their customers improved products and services.

User experiences, faster internet bandwidth, and the universal adoption of smartphones have provided real-time access to financial information at unprecedented levels. This has introduced a new wave of fintech services such as omnichannel payments processing, mobile banking, peer-to-peer payments. The fintech boom has provided SME’s with a suite of alternative financing products such as;

Unsecured business loans

Online applications using real-time business data such as monthly turnover and profit margins are taken into account. An algorithm helps to determine whether your business presents a high or low risk to repay the loan. Fast pre-approvals and your company can receive an unsecured business loan within 1 to 3 days compared with traditional bank finance.

Peer-to-peer Lending

Your business has the option to raise funds through a peer-to-peer lending platform offered around the world. Matching you to individual investors without the need of a traditional financial intermediary. Peer-to-peer platforms list your capital requirements online for investors to assess and determine the credit match, then fund your loan.  This is an excellent alternative for innovative or new businesses that do not fit traditional lending criteria.

Equity Crowdfunding

Raising capital through an equity crowdfunding platform is an option if you prefer a quick cash injection via equity. Start-ups who do not meet the requirements to run a costly capital raising program. Your business receives contributions from many individual private investors who in return become a shareholder in your business. Highly beneficial for new businesses to create brand awareness, accumulate loyal fans and build a customer base. Market acceptance is a test of your ideas before making costly mistakes.

Invoice Factoring

Payment of credit and sales invoices remains hugely popular as another way to receive funding and keep your cash flows stable. Quicker online processors have been developed to deliver debtor and creditor finance where an invoice can be paid within 24 hours.

Merchant Cash Advances

For retailers, a merchant cash advance is an excellent source of funding. This works by advancing a lump sum payment in exchange for a pre-determined fixed percentage of your daily credit and debit card sales until the full amount is repaid. Repayments are flexible as the business repays less in months were sales are slower and more in months when business turnover is higher. New companies benefit from a higher approval rate if operating for under 12 months and have no security of offer.

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Advances for Small Business

Fintech platforms use alternative data sources, such as utility bills and predictive information, to understand their customers their ability to repay. Lenders then create products tailored to their customers, for example providing loans based on cash flow instead of collateral. This enables borrowers without significant wealth or assets such as a home or land to get a loan. As operational efficiencies increase with improved technology, costs decrease, and fintech platforms can afford to serve harder to reach customers.

Data and efficiency advances that allow new customers to be included can just as easily allow them to be exploited. Predatory lenders can target a larger, often less financially savvy audience, providing easy access to capital. Consequently, comes with lots of hidden fees and high interest rates, that lead to a cycle of over-indebtedness.

Enabler of Economic Growth

Innovative financial technologies have the potential to increase economic growth in emerging as well as major economies. Capital allocation is easier to access and increases efficiency, because financial agencies play an essential role in economies. Therefore, technological progress in finance may well generate higher returns that have proved elusive compared with other digital inventions.

Fintech was the fringe of alternative platforms five years ago, for example peer–to-peer lending, crowdfunding and mobile currencies. Finally, being deployed by mainstream financial institutions to tackle central tasks of critical strategic importance. Blockchain (the technology behind Bitcoin) are great examples, offering a radically more efficient and secure way to create and maintain ledgers. Which is certainly at the core of all financial systems and has been slated as a game changer for 2016.

What is the future of Fintech?

The fintech landscape is rapidly changing around the world, and that’s especially true in Europe. This UK enjoys a favourable regulatory landscape, and has quickly become a fertile ground for fintech entrepreneurs. However, the challenge remains for the sector to build a platform that works across multiple borders and jurisdictions. Steve Considine from the Goldman Sachs Investment Banking Division explains that the changing habits and behaviours of the next generation are likely to drive change for the sector. Therefore, adapting to their desire to play a role in how their money is invested. 

Accrutus Capital can help new business owners with less than 2 years trading history, no financials and no security. Offering working capital finance solutions where traditional bank finance is not an option. Call Accrutus Capital on 02 9006 1327 to discuss how to take advantage of fintech advances for small business.

DISCLAIMER

The disclaimer covers content, comments, responsibility, links, government and local laws, jurisdiction and communication methods. None of the contents on this website or blog should be construed as any kind of advice or recommendation. Nothing in it should be taken to constitute a statement that is intended to influence a person or persons in making a decision regarding any investment or financial product. This website or blog does not purport to be complete, accurate or contain all information which its users may require to make an informed assessment of whether to invest in any Offer listed through Accrutus Capital Pty Ltd.

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