FinTech is still considered an industry buzzword by sceptics, but in a short few years, some of the FinTech innovations that were once considered groundbreaking are now commonplace. In fact, according to recent research by City A.M, Britain is significantly ahead of other Europeans in embracing digital banking. The brilliant minds of FinTech keep coming up with new solutions, but do any of their innovations actually matter to small businesses?
If you’re already up to speed on everything FinTech, then skip ahead to our insights into how FinTech can benefit small businesses. For everyone else, here’s what we’ll cover in this article:
What is FinTech?
In 2015, the term ‘FinTech’ (a portmanteau of Financial Technology) gained in popularity. Some people may have felt that the term was just another marketing buzzword for something that banks and financial institutions had been doing for years; making technological advances to benefit financial services, but there’s more to it than this.
The modern interpretation of FinTech encompasses a generation of startups disrupting the financial services industry through new and sometimes radical ideas. This disruption encompasses sectors such as new payment solutions, crowdfunding, money lending and transfers, and even asset finance.
Even though Brexit brought its status into question, London is still the financial capital of Europe. As a result of this, FinTech is a massive export commodity for the UK, bringing investment into British FinTech innovators. Over the past few years, there’s been an exceptional investment in UK FinTech, with UK FinTech investment growing to $37.3 billion in 2021, although the industry hasn’t escaped a decrease in investment in these uncertain times we find ourselves in.
Even the British Government is a FinTech fan, as it makes a substantial contribution to overall UK exports. According to the Department for International Trade (DIT), the FinTech sector employs around 76,500 people and contributes in excess of £11 billion to the British Economy. In fact (also according to DIT), the UK owns more than 10% of the global FinTech share, and is currently home to around 1,600 companies.
Put simply, FinTech is a big deal for the UK and firmly established as a pillar of the British finance sector.
Can FinTech help business owners?
While the importance of Fintech is hard to dispute, it’s only useful to businesses if it helps them succeed. So just how is FinTech benefiting businesses?
In days gone by, if your business needed a specific financial service, you would either visit your local branch or pick up the phone and talk to the person looking after your account at your bank. That was, for the most part, your only option. But that’s not the case anymore. There have never been so many online financial services for businesses to choose from and most of these financial services are accessible wherever you need them. From crowdsource funding and help with government grants to faster payment services. It’s never been cheaper and easier to set up or grow your business.
You could argue that the financial industry was once an oligopoly, with just a handful of institutions offering business finance products and services. A few key events changed all of this: The 2007-2008 financial crisis and the open banking revolution. These changes enabled the financial services sector to respond to the increasing demand for faster and more effective financial services. Of course, with so much information at our fingertips, it’s also become important to offer easy-to-compare financial services. These financial services help businesses find the right service for their needs.
How can FinTech benefit small businesses?
Being open to innovation has always been a standout feature of companies that thrive. Companies that integrate with modern technology such as social media or the latest FinTech innovation tend to truly succeed. Whether that’s through firmly establishing a new business, taking a small business to the next level, or simply doing better than your competition.
As is often the case in our personal lives, the solution to a lot of business problems can be solved in the palm of your hand. That’s right, your smartphone is the key. Through an app or mobile-friendly website, you can tap into financial services that aren’t based on old standards. Instead, they’re built around interconnectivity and finding better ways of doing things. Regardless of whether you’re running a small or multinational company, your company can still benefit from what FinTech has to offer.
Some of the most recent FinTech innovations that have benefitted small businesses include the following:
- Save money by reducing your reliance on paid financial services.
- Some small business bank accounts offer free bookkeeping software.
- Make sending and receiving payments quicker and easier.
- Manage your finances wherever you are and at any time.
- Stay compliant.
- Easily access data about your finances.
- Use third-party financial services to help you manage your finances.
- Set up automation so you can spend time running your business.
Most importantly of all, through FinTech innovations, small businesses aren’t burdened with the time and cost of managing their finances. Saving time and reducing costs.
What's the best FinTech solution for small business owners?
The Best FinTech Payment Processing Solutions
SumUp’s goal is to make it easier to offer products and services online. This enables your business to sell, process orders, and get paid quickly and efficiently through a range of card readers and payment solutions.
Positioned as the fastest way to accept and send payments around the world. Rapyd is already used by businesses like Ikea and Uber as a payment processing solution. However, their services are also available to small businesses.Checkout.com
Checkout.com is here to help you grow your business through a flexible payments platform. Their platform allows you to accept a range of payments around the world, coupled with local expertise.Yoyo
Yoyo provides mobile payment solutions with a focus on building customer loyalty and marketing platforms. Subsequently, Yoyo helps you to stay in touch with and grow your customer base.Ebury
Ebury offers financial solutions that aim to simplify international trade, empowering small and medium-sized businesses that want to trade internationally. From trade finance to international payment solutions and everything in between.
The Best FinTech Banking Solutions
Catering to companies of all sizes, including freelancers, small businesses and scaling businesses. Tide is a FinTech bank that helps business owners on their journey to growing their business. They do this by making banking and finance management easy with powerful integration tools.Anna
Providing an integrated business bank account and tax app at no extra charge. Anna provides a unified FinTech solution that gives you the tools to grow your business. Their toolset includes everything from invoicing to expenses and automated bookkeeping and beyond.Mettle by NatWest
Mettle is offered by NatWest as a business account designed for sole traders and limited companies looking to grow their business. Like the challenger banks on this list, the Mettle account is free and is integrated into modern payment platforms. Subsequently, Mettle helps you access tools that make it easy to manage your business finances.Monzo
Best known due for their rollout in the UK that made owning the iconic coral Monzo card something to show off in their early days. Monzo has become exceptionally popular among consumers. They’ve added a whole host of innovative features to the Personal Monzo account since launch, and they now offer an appealing business account offering.
The Best FinTech Lending Solution
iwoca offers a range of finance solutions, including business loans intended o help businesses buy new stock, invest in growth or simply help keep the cash flow flowing.Funding Circle
Funding Circle specialises in providing a quick and easy path to business loans that have been tailored to help small businesses thrive.Fleximize
Fleximize is an award-winning and industry-leading business lender with a passion for supporting the UK’s SMEs. They offer a personal touch and aim to provide you with the knowledge you need to make your business a success.
Find the best FinTech solution for your business
We hope that from reading this article, you can see that FinTech is more than just a ‘fad’, it’s just the trending name given to innovation of financial products that could help your business to grow. Although we’ve already given some examples of great FinTechs, if you want to find the right one for you, the best thing to do is compare them.