Financial Technology, or FinTech, is a term used to describe a growing number of businesses that are using technology to make financial transactions easier and faster. Traditionally, new businesses would look for financing from a bank or investor. Fintech has changed the way startups get funded.
Crowdsourcing allows new business owners to get funded quickly and with virtually no out of pocket cost. The internet makes transferring of funds from overseas or across state lines easy, fast and cheaper than traditional banking. Fintech businesses can pass on great savings to their clients and customers since they are saving so much money on financial transactions.
Smartphone users in the United States alone reach numbers of over 207 million people currently. Smartphone use is expected to reach 2 billion people worldwide in 2016. This tells us a lot about the rise of Fintech businesses. With so many consumers using smartphones to access not only their social media and personal finances, but to shop, browse the internet and even donate to charities, it becomes clear that this technology is a top driving force for the rise of Fintech industry. The world has become a fast moving machine; fast food, instant financing, speed dating; are all testament to the way consumerism has evolved.
Through the use of modern technology, small businesses are able compete with their larger counterparts. By using sophisticated analytics programs that were, until recently, only available to large companies, these small businesses can get an in-depth look at their clientele. The rise of smartphones and sophisticated computers provides the ability for every business to accept credit cards, give immediate refunds and order supplies in a matter of minutes. It used to be that small business was just that, small business. Consumers did not expect a small business to compete or provide the same services as big corporations. However, with this surge of technology, consumers expect more from small businesses. The lines distinguishing the two have been blurred.
It is important for every new (and experienced) business owner to understand and study Fintech developments and to make them a part of daily business practices. Staying aware of technological advancements and upgrades will help business owners to stay at the top of their field and improve their business. Fintech is ever changing, fluid, and in order to stay educated, it should be a priority for business owners to continually update their knowledge on the industry.