Why Businesses Are Suddenly Deep-Diving Into Fintech

Companies are constantly trying to improve the way they control their money.

It is essential to keep everything ticking over and ensure that the company remains healthy long-term.  

However, firms often struggle on a practical level to make this happen. While many companies have in-house expertise related to their primary operations, they lack much knowledge in the finance-tech space. 

As you might imagine, that’s a problem. After all, technology offers more advanced tools for managing money than conventional approaches. 

Now, though, we have a group of businesses that are finally seeing the errors of their ways. These companies are thinking differently about money and could potentially reshape the entire economy.  

According to Business Financing, many of these companies are becoming more interested in choosing their banking providers more carefully. In the old days, CEOs just selected the building society that provided them with consumer services, but not anymore. 

“Things are changing when it comes to companies choosing bank accounts, and now we are seeing more business people really getting to grips with the different fintech products out there,” Business Financing says. “That’s why we write so many articles reviewing these technology-enhanced services. There’s a huge demand from company executives to understand these products and make the most of them.”

Banks vary greatly in the level of service they provide to companies. Some excel in general banking while others have more niche offerings. For example, Wise is probably the best fintech business account for anyone looking to trade overseas. The company facilitates rapid and cheap transactions that are simply impossible through the conventional banking system. However, other banks offer cashback incentives on purchases, which is another fine perk, or advanced systems that leverage the use of technology to help firms manage their money better. 

“We wanted to make it clear that fintech business bank accounts aren’t the same,” Business Financing says. “There are clear differences between these products so CEOs and executives should be careful which they choose for their enterprises. It’s not always going to be the same service, and some banks might put restrictions on how you can use various accounts while others might have technology that makes doing business much more straightforward.”

Businesses Are Using Cloud-Based Financial Systems 

As you might expect in the midst of a fintech revolution, some of the savviest companies are switching to cloud-based financial systems. These offer scalability, accessibility, and collaboration, improving data security. 

For example, many firms are now hiring fractional CFOs. These individuals have expert skills but only deploy them periodically when companies need them, keeping them off the payroll and reducing costs significantly. 

We’re also seeing firms sharing financial prudence responsibilities using these tools. Multiple team members can collaborate in novel and innovative ways, enabling them to get more done and work together on issues with greater oversight. 

Fintech is enabling this by providing a software environment that makes it possible. Companies had to rely on extremely basic systems until recently. Now, however, business dashboards are giving them more options to manipulate and manage their finances more comprehensively, even remotely. 

Adding Automated Processes

Another development is the introduction of fintech products that automate processes. These have the potential to reduce the overall costs of running the financial side of firms to close to zero in the long term (similar to how computers and the internet cut the price of electronic mail). 

For instance, many companies are handing payroll allocations over to software. Workers are clocking in and out using terminals with systems feeding this information to central computers to work out wages. Getting HR professionals to do it by hand is now no longer necessary. 

What’s more, these systems improve accuracy and reduce errors. Companies no longer have a situation where a worker is paid less than they were expecting because an administrator made a mistake. 

You can see this automation everywhere in fintech approaches to banking. Whether it is something simple like automating payments or more complicated, like using AI to analyze financial trends and create forecasts, these changes are coming. 

Streamlining Internal Controls 

Companies are also looking at ways to improve their internal controls and ensure they minimize the risk of things like fraud and waste using fintech. Firms are doing this by safeguarding their financial resources and making sure they put in place systems that help them comply with regulations. 

For example, companies are taking fintech-based cybersecurity more seriously, hiring experts who can help them defend against malicious actors. Networks are becoming more secure, preventing the theft of money or sensitive information, even in novel areas, such as crypto.  

Furthermore, compliance is taking a central role in the fintech space. Firms are developing powerful tools that can streamline rule-following and ensure nosy regulators can’t fine them for breaking regulations. Many fintech companies are adding these features to their products to simplify operations. 

Adding Financial Performance Dashboards 

The introduction of fintech financial performance dashboards is another addition smart companies are using to reimagine their money management. Companies are utilizing software that keeps them apprised of their financial situation in real-time and helps them achieve their objectives.

This software is effective because it presents financial metrics in ways that even non-technical people can understand. It also provides alerts and tooltips to guide decision-making at all levels. Fintech companies are being careful to ensure that they deliver user-friendly systems that enable companies to take more control of their finances and rely less on outsourced operators, or even their own staff.  

Employees can perhaps benefit from these dashboards more than senior management. That’s because they can make meaningful decisions with them that impact ground-level operations. 

Doing Long-Term Financial Planning 

Fintech is also assisting with long-term financial planning (despite the disruptive influence of technology). Brands are using the tech to look decades out into the future when making decisions instead of focusing on the performance in the next quarter. 

This trend is occurring because companies are seeing the value of ensuring their financial ambitions align with their business operations. Taking a long view is often the only way to ensure that this happens.