Why FinTech matters to the business world today.
The traditional model of a new business turning directly to its local street bank is no longer the only game in town. Fintech is about companies leveraging technology to make financial services more efficient. Fintech companies recognize the opportunity to reinvent the financial services industry through disruption. Consumers and businesses are already benefiting from disruptions to how we bank, invest and transfer money and will continue doing so.
This digital dynamism has also created perfect conditions for the birth and growth of alternative finance sector. The ready availability of this new software has allowed the engineering of platform to support marketplaces or reduce costs in peer-to-peer lending, crowdfunding, selective invoice, finance and more. Whole processes from initial business pitch to money in the bank can be hosted online in a secure environment; borrowers can meet lenders, ask questions, talk to other like-minded investors and pool funds that will benefit the business.
Prior to the rise of Fintech, small businesses had to seek services of a major company that allows them to accept payments from overseas. With the current innovations in the financial sector, the process has become relatively easy and cheap. For instance, the payment solutions e.g PayPal require a small but secure card reader to handle payments. In addition, these card readers are provided to merchants for free at the same time, making transactions through your smartphone means easy such that any customer can pay for products despite their location.
For a long time, small business we have struggled with insufficient capacity to maintain complete and updated profiles as well as keeping wholesome financial records. This is mainly because the traditional methods are not sufficient in the light of most unique startups. This means that bankers can't grasp the whole picture of a small business because there are several disconnects in the way information is relayed and presented. But when the system is digitized , startups can formalize their records and tap into online records of payments and supply chains thus making the financial institutions to view in a new light. With these advancements, credit opportunities expand exponentially since is more transparency and available data is sufficient for future prediction and analysis. From Trendpro Systems Ltd