The world has witnessed major technological revolutions in the past few years which has made Technology storm into the world of finance. Fintech has become an important topic for businesses all over the world since it is fast changing the manner in which businesses operate and cutting on the cost of running businesses.
Small and Medium Enterprises have been the biggest beneficiaries of Fintech so far. Let us have a look at the concept of Fintech and how it has revolutionized SMEs globally.
The concept of Big Data
At the heart of Fintech revolution is the concept of big data which involves the harnessing of useful insights from vast quantities of data. The insights are then used to redefine almost every sector of our economy. Take for example marketing.
Data mining is helping corporates to understand their customers better and come up with personalized products and services aimed at driving the sales of the company further. As our economies become digital, the demand for information and data is on the rise. The role of data analytics is set to grow, and it is therefore imperative that the SMEs embrace the numerous opportunities brought about by the concept of big data or they risk being left behind.
How has Fintech revolutionized SMEs?
Peer-to-peer lending has heavily impacted on small and medium enterprises lending, in the same manner, big data has transformed how corporates understand and relate to their customers. The profound crisis in the banking sector and the great recession has made it almost impossible for SMEs to grow. This is one of the reasons why most of the entrepreneurs are calling upon the private sector to step in and assist in the funding of the burgeoning tech SMEs. P2P lending has become crucial providing the vital capital and the lower lending rates that many small and medium enterprises require to grow.
Blockchain has become one of the greatest technological developments of the 21st century, and many fintech developers are already taking advantage of the reasoning behind it. Similar to Bitcoin, the role of Blockchain in the modern world demonstrates the importance of crypto currency. Apart from it being decentralised, Blockchain offers an undisputed level of security since it is almost hack-proof. The Blockchain can be used for numerous digital operations such as cloud storage.
Fintech is helping SMEs receive instant payment for goods and services that they offer to customers. Many SMEs have moved away from the traditional transaction methods where you have to wait for more than 30 days before you receive the payment which was sent long ago. Invoicing companies have come into play which offers to provide a solution to the invoicing issues by providing an invoice finance service.
Whether you are a Forex Trader on CMC markets or an options trader, you do not have to wait for 30 days before you receive your payment. The invoice service allows businesses to receive most of the value of the invoice through an upfront payment. This can easily be done through a broad spectrum of innovative online platforms that are easy to access. The platforms allow you to receive the lender’s payment within 24 hours.
Fintech offers cheap yet effective solutions to SMEs
The solutions that Fintech offers to most of the SMEs around the world provide viable answers to most of the problems faced by the SMEs such as insufficient funding and cash flow problems. The Fintech solutions are paving the way for greater accessibility and financing options for many SMEs.
As time goes by, Fintech is poised to take over the numerous outdated financial systems in place which will ensure that there is always a more modern-day solution to the financial problems faced by SMEs around the world. Many entrepreneurs are already interested in finding out the advantages the Fintech offers to their businesses and investment plans. More SMEs are going to turn to Fintech companies for assistance hence incentivising the development of more fintech solutions with time.