Unless you’ve been living under a rock, you may have heard the term ‘FinTech’ in recent years. But what does that mean? How does FinTech affect you in the real world?
Let’s start with the basics. FinTech stands for financial technologies, which means all those technologies which apply to the financial sector. In recent years, and especially after the 2008 World Financial Crisis, FinTech innovations have become the answer to all those businesses who had lost faith in traditional financial services, including loans, fundraising, money transfer and more.
FinTech start-ups are fast-moving and managing huge capitals, which means the technology can innovate the way business used to be done in the past.
Financial technology services like mobile payments or money transfers are undoubtedly revolutionizing the way business is conducted, making it easier than ever to start a new business. The way it used to be was: “I don’t have the collateral or credit to get approved for a traditional loan, that’s it, I’m done, there are no more things I can do to begin my homemade pasta sauce small business”.
Well, aspiring business person, let me introduce you to the concept of crowdfunding. As the word suggests, crowdfunding means you can collect money from a crowd of people from all over the world. People you’ve never met and who haven’t tried your pasta sauce (otherwise they would never dream of funding you ;)).
Thus, the process of funding your idea has become more “democratic” and time from the initial idea to actually running a functioning start-up has reduced considerably. Now that your business has got that initial boost that only a big infusion of cash from strangers all around the world can give it, it’s time to sell!
Financial technology services extend way past what you could imagine. In fact, accepting payments for small businesses is just one of the strong points of this booming industry. While there are fees, anyone who has a certain volume of business can qualify to create an account and safely accept credit card payments.
FinTech is also changing customer behavior and modifying expectations quickly. Consumers are now adjusting their investments or making transactions while they’re waiting for you to deliver their pasta.
Embracing the latest technology developments is a must for big and small businesses alike. And the amount of investments in FinTech all over Europe—from Switzerland to Italy—over the years indicates the quick radical change in how money is perceived by the business community and consumers.
In the map and graph in the above link, it’s clear how FinTech investment has radically increased since 2008, albeit a dip following the controversial Brexit vote in 2016 which seems to have slowed down investments in the earlier stages of funding. Yet the consolidation of existing businesses and the increase in funding in later stages appears to be going strong.
Financial technology services are in their early stages. The money transfer, payments, and loaning services industry is changing at a fast pace. Jumping on the bandwagon is what could make the difference between a successful venture and a colossal failure. Missing out on this opportunity could mean loss of business, loss of clients, and less awareness of your product in the market. Which, in the case of your homemade pasta sauce, is not entirely a bad thing!
Nicola Clothier is the CEO of Accurity GmbH, a Swiss-based employment service provider. Nicola has an Honours degree in English Literature from Stirling University, more than 20 years’ experience in Swiss employment, and personnel leasing up to executive level throughout Europe.
