Mention the term finance and majority will probably cringe at the word. Finance does not come easy for people unless one has the eye and aptitude for it. And in today’s world, it has even become more difficult to understand everything with the introduction of fintech. For those of you who have not heard of the word until now, put simply, fintech is a financial tool to support and assist the financial services sector covering a wide range of consumer and trade financial institutions. It includes retail banking, lending, investment and cryptocurrencies, among others. It is the big name nowadays and can help your business succeed.
Access to Financing
Before the advent of Fintech, the traditional way to get funds to start up a business was to go to the bank, fill out a loan application, go through a vetting process and wait that it gets approved. With Fintech, there are several finance and business platforms that are available such as this example from Norway. Nowadays, there are even Fintech-based platforms that do not need credit scores to lend you money. They can access and validate the needed information right away so that a small business can get funding in a short period of time. Even peer-to-peer lending (elimination of the middleman such as a financial institution) was born out of this and today, small businesses have access to a lot of financing or lending options.
Access to Equity Investment
Fintech has not only changed the way you can borrow money, it also opened doors to raise the equity investment you need for your business. The crowdfunding innovation was a resounding success enabling businesses to generate investments that they require through online platforms where individuals can put in small amounts of money. Think of Kickstarter and Crowdcube, two of the most notable and successful crowdfunding schemes.
Who would have imagined you can pay for services and goods through a computer or through your mobile phone? Fintech has certainly done that allowing you to receive and take payments from anywhere in the world, anytime. Decades back, you would have gone to the bank, open a merchant account, lease a machine and dedicate a fixed phone line hooked to the financial institution.
From generating capital and equity investment for your business to receiving/taking payments and managing your cashflow, Fintech has transformed how the world operates in the finance sector. All for the better, we might add, as efficiencies and gains kick in.