A few months ago, Fintech seemed like nothing but a buzzword used by financial news sites. However, it has grown tremendously since then. Fintech has grown double-digit since 2020. Following the pandemic, businesses realized the need to come up with alternative payment options. Fintech transactions became very popular thanks to their simplicity and ability to streamline operations. Here are a few ways that Fintech has been facilitating the financial operations of businesses.
1) Simplifying Difficult Processes
Businesses have been recording low productivity since the pandemic was reported. A simple way for finance heads to improve efficiency is through spend reconciliation. Unfortunately, innovation hasn’t been great in this area. Most companies still rely on manual and labor-intensive processes. They are unreliable and costly.
With Fintech tools, however, most things are automated. From approving the incoming invoices of suppliers to more complex areas, businesses can reduce their reliance on manual processes.
Fintech tools improve transparency. They improve visibility in essential areas like automated analytics, delivering control, and employee spending. Some tools can automatically connect expenditure to specific employee functions. This simplifies and speeds up processes that would otherwise be manual and time-consuming.
2) Improving Payroll Services
Fintech has become a game-changer for global payroll services. Companies looking to offer international payroll services can find value in using Fintech. It streamlines the processes that go into executing payments. It factors in all the critical factors, including available transaction methods and global compliance laws. Payroll Fintech is the future of corporate payroll services.
The HR and payroll management solution has become popular in most parts of the world. It makes it possible to not only deposit wages into employee accounts but also perform all the important tasks. They include: calculating work hours, calculating taxes and creating management reports.
3) Dealing With Fraud
Did you know that businesses lose about five percent of revenue to fraud annually? In a typical fraud case, a business can lose about $8,300 per month. Most fraud cases go undetected for about 14 months. The biggest reason why your business may be susceptible to fraud is poor internal controls. It is especially common when the economy is unstable.
Fintech makes things better. It uses machine learning and AI algorithms to understand and detect your business finance patterns over time. If anything seems incorrect or unusual, it is flagged down for review. This is a huge benefit over traditional approaches. While rule-based systems can pull out some fraud, they don’t offer the same level of security as Fintech. With AI and ML, Fintech can compare data over time. It can easily detect anomalies and questionable correlations.
4) Faster Online Payments
Fast online payments are beneficial to both businesses and their customers. The COVID-19 pandemic increased the demand for cashless payments, and Fintech made them much easier. The most popular Fintech payment companies include Venmo, PayPal, and Stripe. They have greatly improved the safety and convenience of online payments. With Fintech solutions like BigCommerce and Shopify, small businesses have a wider reach. With Shopify, for example, you can access credit card payments and sell on Facebook.
5) Better Access to Additional Financing
It is impossible for small business owners to run their operations without cash. Unfortunately, traditional lenders don’t always consider them eligible for small business loans. Lenders consider these businesses to be risky borrowers. Therefore, they demand lots of in-person interactions before approving loan applications. The entire process is long and complicated.
Fintech online lending has automated and simplified the loan application process. When a small business owner needs a loan, they can access it by submitting an application through their phone or laptop. The process is more straightforward, and the approval is much quicker than with traditional lenders.
Fintech supports financing platforms like Kabbage, Giggle Finance, and Fundbox. They can have applications approved in just three minutes. Businesses can get funding as soon as they need it.
6) Improved Financial Data Security
Data breaches are a real threat to both small and big businesses. However, small businesses are more vulnerable than big ones. Small businesses make up about 28 percent of all data breaches. A single cyber-attack can lead to severe damages. It could injure the credibility of a business.
Today, many companies use biometric payments. Systems can charge a customer’s credit card using their voice authentication, face recognition, or fingerprint scan. Businesses use complex algorithms and data encryption to improve security. Fintech has several solutions to promote the safety of online and mobile transactions. They include Aspiration, Feedzai, and Simility.
In conclusion, Fintech has revolutionized the finance world, and it continues to empower businesses. It has streamlined daily operations to the benefit of both companies and their customers.