The rapid development in today’s technology is actively shaping our everyday lives, including how we do business. It has made things more accessible and convenient for consumers to interact and transact with merchants just a click away.
That said, the digital technologies available in the market are making consumers and entrepreneurs seek for these technologies to maximize and foster an easier and streamlined transaction process between each other.
Since smartphones, tablets, and personal computers have become a necessity in our daily lives, trends in the financial sector have switched to fintech applications. That said, incorporating fintech and automating your services can make your business remain competitive in the market. To give you a more in-depth look at the benefits of financial technology (fintech), this article will talk about the advantages of fintech to your business growth.
Financial Technology, more commonly referred to as Fintech, is a modern technology that seeks to develop, automate, and streamline financial services. Specifically, these are software and applications that help users experience financial transactions through the specialized algorithms used in personal computers, smartphones, and other digital devices.
As the demand for achieving convenience with financial transactions grows, fintech is widely utilized today for the following services:
- Mobile payments. Now that our smartphones are capable of installing finance apps, mobile banking and e-wallets allow you to pay for bills, groceries, and other necessary remittances without having to bring cash or leave home.
- Online financing. Individuals not fond of owning a credit card can loan through their smartphones as banks are now capable of offering online loans. E-commerce can also provide installment options for people unable to pay on the spot.
- Crowdfunding. People who want to start a business but get rejected by traditional banks now have the option to lend money through crowdfunding as this finances loans, fundraises, and covers unexpected medical expenses.
With mobile payments, online financing, crowdfunding, and so on, businesses will be able to track and make transactions with a simple tap. This also gives entities the ability to hasten data gathering.
Digitizing various financial services allowed people to easily access banks, payments, insurances, etc., which would normally take time when done through traditional methods.
With fintech readily available for businesses around the world, numerous opportunities can be opened that increase an entity’s accessibility and growth. Below are several advantages can increase the chances of streamlining the financial aspect of your establishment:
- Easier Payments
Through fintech, companies are able to make payments and other financial transactions easier for their customers. Businesses can now offer bank transfers or online payments by using e-wallet services such as G-cash, Paymaya, Paypal, and so on.
Incorporating bank transfers and e-wallets into your business transactions can make your company and clients enjoy a more manageable and faster payment experience. Below are some benefits of e-wallets and bank transfers:
- Track payment receipts. Most e-wallets have a “My Transactions” page where you can see and track your payments. Keeping paper receipts won’t be necessary as payments made through e-wallets can be easily tracked through the platform’s records.
- Efficient payment methods. Utilizing e-wallets can save your customers time as this enables them to have a faster and real-time payment transaction.
- Discounts and cashback. Most e-wallet applications provide cashback and discount promos that entice customers to make transactions using the application. An e-wallet option for your business will help your entity gain more customers as they will save more money due to the discounts given.
When the pandemic started, e-wallets also started to boom as people preferred to stay home and use digital platforms to buy and pay for necessities. E-wallets also provide a savings option, enabling individuals who are unable to apply for a traditional bank to save money by using e-wallets.
- Cost Reduction
Many think that availing of technologies can be expensive. However, digital platforms can help with overseeing an entity’s financial status causing it to lessen its operating costs. New technology such as artificial intelligence (AI) can help complete tasks even in the absence of human supervision. AI also gives numerous benefits, such as the following, that help entities improve their financial situation:
- Increased accuracy for financial records. Before AI existed, bookkeeping and accounting processes were made manually, which can potentially incur human errors that damage an entity’s performance and profitability. Utilizing AIs can make your accounting processes, such as data entry, bill payments, and invoice processing, more efficient and accurate.
- Access to financial insights. Taking advantage of financial insights and regularly studying them can give you an outlook on your current and future financial situation. AI can also help with strategic business decisions to ensure the company’s financial success.
- Automated Processes. AIs can also reduce repetitive work such as document review or pulling information from your records which can be time-consuming.
AIs can be costly at first. However, incorporating it into your establishment can help your entity reduce its operational costs resulting in an improved financial position. Financial AIs can also automate tasks in order for your other employees to focus on bigger tasks that need more detailed attention.
- Enhanced Security
It is vital to ensure the safety and security of your financial information. Data falling into the wrong hands may result in bankruptcy and business losses. Studies show that capital markets and banks spend approximately $18.5 million annually fighting cybercrime.
As time progresses, several institutions have problems with hackers invading their systems. A report by Statista showed that in June 2021, there were over 98 thousand cyber attacks in the Philippines.
That said, enhancing the security of your entity’s financial data is essential. Aside from speed and convenience, fintech also provides protection such as the following:
- Fraud detection. One thing hackers do is tamper with your account for them to use it. Fintech AIs can analyze your purchase behavior and will send out a trigger warning once something seems out of the standard spending patterns.
- Cyber attack prevention. With today’s technology, a cyberattack can be prevented as AIs can detect and alert companies once data patterns show discrepancies and unusual activities.
- Risk management. Aside from preventing and detecting online attacks and risks, fintech also helps identify new trends that can assist with threat prevention, workforce conservation, and collecting data that can be used for future planning.
Now that cybercrime is rampant among businesses. Companies must ensure that their financial data is safe and secured. Using modern technology for cyberattack prevention can help your entity keep its data from being breached.
Prior to online payments and transactions, fintech is already present, but its main purpose is only for back-office support for bankers and businessmen. The COVID-19 pandemic has opened more opportunities for fintech usage.
A report stated that in Europe, the pandemic had caused a substantial rise of 72% in fintech utilization, while 73% of Americans considered fintech as the new normal.
Today, entrepreneurs widely use fintech for more purposes such as digital payments and finance automation as artificial intelligence has emerged and has become the new trend in the business world.
Automation has been a great help concerning business operations. With AIs helping financial sectors, companies will acquire better risk management that will help them secure their finances from possible outside threats. That said, entrepreneurs and customers will have safer and faster financial transactions.
Integrate Fintech to Expand Your Business Growth
With digitization and modern technology, operations and transactions are now made easier for both businesses and consumers. That said, integrating financial technology can create more streamlined and efficient services that increase your company’s growth.
Utilizing fintech can be worthwhile as this will provide better accessibility and easier transactions. If you find incorporating fintech into your business operations challenging, you may seek help from accounting firms to better understand fintech and the benefits it can provide to broaden your business growth.
Incorporate Fintech Into Your Business Operations
With a large pool of accounting services, our team is dedicated to helping you incorporate financial technology to increase your business’ growth.