What is Fintech?

June 28, 2015 by Andy Crow @ Chorus Business Advisers

What is Fintech?

The latest buzzword in business is “fintech”, but what does it mean? It is a new market that integrates finance and technology. This new market is transferring traditional processes of finance such as banking, supply chain, payments processing, deposit accounts, life assurance etc. to new technology platforms.

Why it affects businesses?

The rise of fintech has forever changed the way companies do business. The traditional models of a new business turning directly to its local high street bank or conventional investors are no longer the only options.

From crowdsourcing to mobile payments, there has never been as much choice to entrepreneurs as there is presently. It’s never been cheaper to not only set-up your business, but also to expand it.

Crowdfunding, allows people to get funding quickly and easily from anywhere in the world from people they have never met. Instead of lengthy investor talks, entrepreneurs can pitch directly to the world via the internet.

Transferring money across borders is another area that is changing. For example PayPal has made the traditional (and expensive) banking process of transferring money far cheaper than was previously possible, not only locally but internationally too.

New online only Challenger banks are far more “agile” than traditional banks as they don’t have the same overheads. Their relative lack of size also allows them to innovate and adapt to the rapidly changing world. Only last week, Atom Bank, which will use only mobile apps and won’t have any branches or even a website, secured its licence from the Bank of England.

How it affects the customer

The rise of the smartphone has changed the behaviour of consumers. People now access information and data from anywhere. Most people on a train are now studying their tablet or smartphone.

This creates a huge advertising opportunity for businesses and soon no enterprise will succeed without the right fintech services in place. For example if your business doesn’t accept credit or debit card payments, you will undoubtedly miss out on sales. By making your business accessible through a phone, you have the opportunity to market your product or services globally. Customers can now expect the same range of services from a small firm as they do a larger one, and technology allows David to compete with Goliath on a far more even footing.

The rise of fintech has opened up a world of possibilities. Businesses can offer more services than ever and for a fraction of the price of what it would have cost before.

Entrepreneurs need to view keeping up to date with fintech developments as a vital part of their daily life. Being aware of the latest opportunities and developments within the field will only improve your business and keep you ahead of competitors. Chorus Business Advisers can offer advice in many of these areas. We offer a free initial consultation and can be contacted on 0845 8671263 or email info@chorusadvisers.co.uk