The last decade has ushered in the digital world into our everyday lives. Digitization is not just about offices using complicated software, or the most intelligent employees working on computers throughout the day. We are dealing with a digital world in every realm of our lives. Mobiles have ensured that technology is available in a single swipe, and e commerce portals have ensured that what can be seen on a mobile or laptop can be delivered home in as little as half an hour today. Feeling hungry? You can have your food delivered digitally. Want to shop? Browse through thousands of clothes, check for sales and then get the ones you really love delivered at your home. Need to transfer money or have any banking related work? Well, your banking needs can be met digitally. Through fintechs, one can get a loan approved or pay salary to employees through recurring payment model, all with the click of a button.
Understandably, the business landscape today has become significantly digital. Even people-intensive industries such as hospitality, construction, and real estate need a significant digital footprint in order to survive and grow. Restaurants attribute up to 50% on an average to online orders. Real estate bookings are almost entirely sourced through online sources. And this is possible because the customers find it convenient to visit an online store rather than a brick-and-mortar shop.
Especially after the Covid years, when most businesses were pushed into the digital world, today enterprises of all sizes and all industries have specialised supply chain. While large businesses deploy enterprise ERPs to manage their supply chain, until a few years ago small businesses found ERP solutions quite expensive and hence a luxury. This has changed since the middle of the last decade. Cloud ERP providers have brought the benefits of professionally designed ERPs to small and medium businesses as well. Thus, digitization has influenced both sourcing of business as well as delivery of it.
While strides have been made in lead sourcing and process automation, finance management had been relatively slow in catching up. The reason for this is that businesses across industries depended on banks and finance companies for their financial management. The banking system had to be digitized and ready in order to influence how businesses transacted efficiently. Thus, it was a slow and steady change, brought in over the years.
World over, the banking and finance industry has been going through a digital overhaul so that financial transactions can be smooth, fast and friction-free. The rate of this overhaul is different in different regions. Nevertheless, there is a global realization that banking and finance is an integral part of efficient business operation and digitization of the banking and finance sector is key for any economy to grow exponentially.
It is at this juncture that Fintech has entered to serve the need for digitization of business, finance and banking. While banking is going through digital transformation and standardization, there isn’t much standardization on how banks extend their services to their business customers. European Union and other nations have brought in the concept of open banking and General Data Protection Retulation (GDPR) to standardize banking and finance services to customers. This will eliminate some friction for businesses to access finance functions. However, such initiatives have not caught up universally yet.
To overcome this gap, Fintech acts as the bridge between businesses and banking & finance providing the crucial technology landscape, allowing both businesses and the BFSI to focus on their core functions. Apart from being the bridge, Fintech brings the crucial aspect of rapid innovation into the equation. Fintech democratises innovation and offers the fruits of innovation at affordable value to businesses.
Imagine being a business that gets to choose from multiple options with competing banking products offered entirely digitally with varying differentiators, as against walking physically to multiple banks one by one where all of them providing same non-differentiated products.
Imagine being a business which gets to access basic banking, cards, expense management, book keeping all available digitally, tailored to your need, just when you need under a single login.
Imagine easily integrating your ERP, your CRM and your book keeping cloud options with your banking option so that your action in one solution reflects in all other integrated systems. Imagine paying for all these services only when you use them and only to the extent you use them.The power of efficiency, saved time, and cost effectiveness resulting from the above is unmatched and it is available to small and large businesses alike.
Fintech today provides this crucial differentiation to businesses which was simply not available a few years prior. Businesses, small and large, which embrace this transformation, review the Fintech landscape for solutions most suited to their operation and utilise them, will gain unfathomable, insurmountable edge over competition.
Disclaimer
Views expressed above are the author’s own.
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