By 2017, the transaction value of the global Alternative Lending market was a whopping US$376.3 billion. Fintech innovations are largely driving this financial technology, which comprises of a rapidly growing number of startups and businesses using technology to make financial systems more efficient. These innovations allow borrowers to apply for business loans without necessarily involving traditional banks. Small businesses are joining the Fintech revolution at a tremendous rate, fostering growth in the financial industry.
Fintech innovations like digital wallets, peer-to-peer financing, mobile payments and robo-advisors are creating a world of opportunities for small businesses.
The Future of Lending
Many online lenders are offering saving schemes and suitable loan packages for small businesses through innovative digital saving and lending solutions. In digital lending, the platform allows financial companies to automate and speed up the loan decision process. Acquiring loans is faster than traditional banks and funds are accessible within a shorter time. Soft-pull lending has dramatically increased lending to small business owners, allowing them to get the funds they need for their business expansion. Another area is digital banking whereby customers handle banking operations online. It has eliminated the long queues seen in traditional banks.
Fintech has also helped small business owners to get the funding they need to manage personal, and business finances in check. Financial software such as Intuit QuickBooks’ completely automate payroll to an in-house venture reducing costly mistakes thus improving productivity. It also allows customers to handle their income and expenses via their mobile devices and the web.
Fintech is Fast-Tracking Loan Processes for Micro-Businesses
Peer-to-peer lending innovations are playing a bigger role in offering faster loan applications and shorter approval times when compared to traditional banks who typically take longer to do so. Fintech companies offering peer-to-peer lending solutions usually take 24 hours or mess to approve and fund business loans. This is possible due to the more streamlined processes of evaluating customer data. Getting valuable customer insights was not always easy. However, despite the numerous customer interaction points available today, customer data can now be easily collected and quickly analyzed in real-time, creating a clear picture of a borrower’s financial status and creditworthiness.
Fintech startups are also largely contributing to the automation of underwriting processes. The automated solutions also extend to business risk assessment, significantly speeding up loan processing and eliminating direct human intervention. Ultimately, automation helps reduce business operational costs, allowing lenders to provide loan products with competitive interest rates to potential borrowers. This way, micro-businesses that have long struggled to get loans from traditional lenders can now get the funding they need without collateral.
A New Breed of Fintech Tools for the Small Finance Sector
FinTech innovations are also making electronic invoicing possible. Business owners are paid by their customers instantly from any part of the world, eliminating the amount of human interaction required for processing of the payments. This saves businesses a lot of money in the process. FinTech has also made Accounting management tools affordable and more accessible, making expense tracking a breeze. Small enterprises can integrate their accounting software with others fintech tools, to help them pay off their loans seamlessly.
Using smart Fintech innovations like Domuso, Entrepreneurs like property owners and their management teams can now manage their real estate properties and tenants remotely by sending out monthly rent notices and also receiving payments via their mobile devices. Tools like Domuso also enable tenants to make payments like security deposit through options like installment loans.
Fintech is impressively revolutionizing the financial world, improving decision-making processes and streamlining services in the finance sector. There is no doubt that new innovations are making it possible for small businesses to serve customers all over the world in real time.