It is clearly established that FinTechs drive profits and efficiency for owners and managers of SMEs, writes JACHIMMA ANIKWE.
FinTech is simply Finance and Technology coming together to offer innovative solutions to businesses. Most FinTech companies specialize in one aspect of banking services. Specialisation enables them make their services as user-friendly and efficient as possible for their consumers. Even better, they often offer services at a lower cost making more people drawn to their services over those offered by more traditional banks.
As an SME business owner, what does this mean and how can one benefit? Here are our 11 best suggestions on how SMEs can take advantage of FinTech to drive efficiency and profit.
1. Customer Service
FinTech helps financial organizations to serve their customers better. There a number of customer-facing technologies ranging from Block chain to Mobile apps that make customer service easy and convenient.
2. Financial Inclusion
FinTechs solve the problem of access to financial services and effectively closes the long standing gap that hitherto existed between people and financial institutions. In most rural settings, SMEs acquire point of sale gadgets that enable them carry out seamless financial transactions from their rural factories or shops.
3. Consumer behavior
Globally, FinTechs are also changing the behavior of consumers by raising their expectations of self-financial services. Armed with a Smartphone, SME owners and consumers are no longer willing to make long trips to banks or queue up to see tellers who may or may not be versed in the art of customer service. The days of spending long hours trying to achieve what they could on their smartphones are long gone.
4. Competition gains
The Nigerian company Kuda successfully eliminated the need for a physical bank branch, by going fully digital with its operations and services. Innovations like this are causing traditional banks to embrace the latest technologies in order to keep their customers’ business. Consequently, SMEs get better and lower-cost services.
5. People interactions
FinTechs make businesses more efficient by allowing entrepreneurs access to an increasingly digitized space. With their innovations, companies interact better with their employees, suppliers and customers.
6. Payment processing
Doing business has never been easier as electronic invoices can be created and sent out online. Payments are processed with the smartphone in a matter of minutes, regardless of the distance between the contracting parties. I mean who doesn’t love to get paid faster?
7. Operations Management
FinTechs also help businesses streamline their operations by eliminating the use of multiple software for Finance, Accounting and Marketing. The new breed of enterprise resource planning tools (ERP) like Sage, Zoho and Odoo; which are all integrated, provide a complete picture for SMEs.
8. Smart Accounting
Similarly, accounting has also been made smarter with the existence of fully digitized cloud based software. These help SMESs to manage their finances efficiently. They also generate consolidated financial statements easily to access credit and complete reporting as at when needed.
9. Personal Finance
Personal finance apps such as REACH empower individuals and business owners to take charge of their finances. They help them understand their spending habits, track their income and expenses, and create personalized budgets. They provide access to information that traditional banks have long hoarded.
10. Loan applications
The processes of acquiring loans are not left out of the FinTech innovations. Today there are lending startups that provide SME owners with fast access to loans. Lending startups like FairMoney and Okash make it easier for finance to be accessed at lower interest rates as compared to traditional banks.
Nigeria is challenged by widespread poverty, infrastructure gaps, unstable electricity, and regulatory complexities. All of this combine to slow down our nation’s growth projections. However, despite the political and socioeconomic struggles impeding Nigeria’s overall progress, our financial technological prospects are thriving. FinTechs do indeed drive profits for SMEs. Ultimately, they help to solve some of the key development challenges of our small businesses.
About the Author
Jachimma is a final year student of Marketing and is also affiliated as a Media and Content Creator/Writer with a FinTech startup.