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3 surprising innovations that will fuel the growth of your business

Fintech

By David Harrington

Finance is often a complex and challenging area for small businesses.

Companies are constantly evaluating the latest technologies to achieve their financial goals and stay ahead of the competition.

Whether it be accounting, payroll or e-commerce, applying the right technology in the right situation can yield enormous results in terms of profitability and cost-efficiency.

Financial Technology (Fintech for short), is an area that has emerged to enable SMEs streamline their financial operations and make life easier for their customers.

Here are three recent innovations in Fintech that SMEs can leverage to grow their business and stay ahead of the curve:

1. Bitcoin technology

While Bitcoin remains somewhat of a mystery to most business owners, things are changing rapidly for the world’s first and largest digital currency.

Often covered by the press as an unproven means of transacting money, secure Bitcoin applications and platforms are emerging that are tailored towards the needs of small to medium-sized enterprises.

SMEs can take advantage of this borderless, purely digital and quickly maturing ecosystem by making Bitcoin a part of their e-commerce strategy.

Companies can reach new consumers who either prefer to shop online with Bitcoin or do so because they’re unbanked.

Services like BitPay offer free plans suitable for small businesses that will process Bitcoin payments, convert them to a local currency and deposit the money into a bank account.

Goodgame Studios, for example, is a video game company in Europe now utilising Bitpay to accept Bitcoin payments from it’s customers.

By doing so, Goodgame gives their customers access to a seamless and secure payment experience, without the hassle of local currency conversion.

Bitcoin purchases also avoid the fees typically associated with online credit card transactions, which add up very quickly over time for many small businesses.

2. Invoicing exchanges

Getting paid on time and in full for every outstanding invoice or contract can be a major headache for many SMEs.

Staying on top of vendors, suppliers and customers that owe money can be an enormous time-waster, not to mention the inability to put that capital to good use.

Fintech has stepped in to provide a solution, with online services cropping up that allow businesses to sell or auction off their invoices and receive cash immediately.

Companies like ApexPeak in Singapore, for example, will purchase an outstanding invoice and provide the business owner 80 percent of the value.

The remaining 20 percent is given once the invoice has been paid in full. Services like ApexPeak collect a fee on each of these transactions, but the benefit to small businesses is the elimination of the hassle associated with collecting on their accounts receivable and the ability to use the cash right away to pay off debt or reinvest for growth.

3. Lending platforms

Growing any business requires money and working capital, and many SMEs are unable to secure the funding they need to expand. In some cases, additional capital is needed just make payroll and keep the lights on.

The Fintech sector is now stepping in to provide some powerful alternatives to traditional bank loans if a business is struggling to meet its funding goals through traditional means.

Companies like Kabbage, for example, provide loans to small businesses based on criteria other than credit scores by analysing key metrics in logistics, finance, and e-commerce to determine the health of a business.

Creditworthy SMEs that lack a significant track record are then able to attain funding in a shorter period from borrowers willing to take on the risk.

Crowdfunding, both in debt and equity, are also recently created Fintech alternatives to traditional lending. Start-ups and SMEs can utilise platforms like Symbid to create crowd-funding campaigns to raise a specified amount of capital.

They can target pitches not just to Angel Investors and Venture Capitalists, but to outside resources such as friends, family and individual investors.

This builds on top of one of the most widely used Fintech innovations in consumer lending, peer-to-peer applications such as Lending Club that connects individual borrowers to lenders at a small fee.

Looking towards the future

Fintech innovations in the SME lending space should continue to grow in the near future, as not only are business seeking access to capital, but investors are now looking outside the box for higher returns on their capital.

While keeping pace with innovation is often a challenging process for many SMEs, discovering and leveraging new technology doesn’t have to be difficult or painful.

Fintech companies are striving to create increasingly simple, cost-effective solutions to address many of the key issues in finance and payments experienced by small businesses.

By being early adopters of some of the emerging Fintech innovations we’ve discussed here, SMEs can get ahead of the curve in terms of streamlining finances, differentiating from competitors and ultimately fueling business growth into the future.

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About David

David is a technology enthusiast and professional focused on the latest business solutions and innovations driving change for companies of all sizes. He currently manages Business Development for TRUE Clarity Co. Ltd., a Sage CRM Premier Partner in Thailand.

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