Fintech is one of those words that has an air of mysticism but is something most of us use regularly without even thinking about it. Fintech, put simply, is the amalgamation of the two words ‘financial technology’ and it is all those things we use to make our financial transactions safe and secure, both as consumer and seller. How does it help you as an SME though? Here are 3 areas that Fintech could help you in a practical way:
Online payment platforms.
As consumers, we know how important it is that the data entry for credit/debit cards is secure, and we would [hopefully] never send our card details through an unprotected method such as email. The technology behind this means that your financial data is not held by the seller of the product/service you are buying from, and that no-one else can access it, giving you peace of mind. It is also peace of mind for you as the business, as you can be confident your customers’ data is protected.
There are a lot of Fintech companies that provide online payment platforms. Probably the most well known is PayPal but there are others for you to choose from, for example; Stripe and WePay. Make sure you research these companies properly to ensure they are right for your business and customers. And it is essential you read and understand the service offer as you will need to make sure the one you choose is compliant with UK regulations such as GDPR and Data Protection.
Fintech has increased the range of ways you can raise investment for your business, one of these is crowdfunding which continues to increase in popularity. This increase can be seen in the figures from the University of Cambridge, Judge Business School:
Equity based Crowdfunding was £4 million in 2012 and £549 million in 2020
(Source: The 2nd Global Alternative Finance Market Benchmarking Report)
There are a lot of crowdfunding platforms out there, and most have a particular focus so take your time researching them to make sure that, a) they best suit your needs, and b) they are genuine. Here are a few examples to help you get started about thinking about what crowdfunding might entail and what it might offer: Crowdfunder; GoFundMe; Kickstarter; Spacehive.
Some people love working out their business spend in great detail. Many more do not! If you fall into the latter camp, then a budgeting app could be of great use to you. As with everything, research the options to get the best one for what you want to use it for, eg, do you want something to help you manage your personal survival budget or are you looking for something to help with your business accounts? Budgeting apps can for example be used to set up automatically generated invoices. Here are a few currently on the market: Money Dashboard; Monzo; Chaser; Quickbooks.
The Financial Technology (FinTech) industry’s revenue is anticipated to expand at a compound annual rate of 6.1% over the five years through 2026-27 to reach £16.1 billion. (Source: IBISWorld 1999–2022 ‘Financial Technology in the UK’ Sep 21)
This forecast highlights how Fintech will continue to develop, grow and diversify to meet the needs of its users; this is you! So, always keep a look out for new systems that can support you run your business. You can find published research at the Small Business Research & Enterprise Centre, where you can learn about how this industry is developing and how it could suit your business. We will also soon have the Beauhurst database, where you will be able to find Fintech companies, with information to help you make decisions about which might be the best for you to use.
*We strive to do our best when supporting small business and their growth. Our business databases can give you information and data that can help you with advertising, market research, company information, and industry factsheets. If you have already taken the plunge, we would love for you to join us at a seminar, our workshops cover digital marketing, business model canvas and planning, demystifying taxes and intellectual property to name a few. Visit our events page or website for more information.