Exponential technology advancements constantly introduce products and solutions to help companies and entrepreneurs boost their performance. FinTech, or financial technology, allows anyone who is part of the business world to grasp a better understanding of finance and improve their use of financial services. FinTech products and solutions are designed to allow businesses and their stakeholders to better manage financial operations using dedicated algorithms and software. They encourage a consumer-oriented business approach, significantly enhancing customer experience, and therefore, positively affecting business performance.
To help you maximize your business’ potential, read on to learn about 4 FinTech solutions that you won’t regret trying.
Peer-to-peer lending is an alternative to receiving loans from banks or any other financial institution. Basically, qualified applicants receive money from a person or a group of people who are willing to loan them money. Websites that connect investors to those who are looking for loans have revolutionized the world of finance. They made it easier for business owners to finance their businesses and complete financial transactions. Before they are allowed to use the platform, borrowers are pre-approved and vetted to make it easier for lenders to find credible borrowers.
Each website allows investors to set the terms of the loan and the borrowers to view the terms and rates. Upon agreement, the website enables the transaction. Each peer to peer marketplace or website possibly targets a different clientele, differs in tenures, eligibility criteria, loan rates, and amounts. Businesses can choose from these websites and settle on lenders depending on their financial situation along with other aspects of their business. Both parties benefit from this arrangement as borrowers are provided with an easier and simpler way to get loans, and lenders are provided with better returns in comparison to a brick-and-mortar bank’s interest rates.
Asset management systems that are FinTech-based offer businesses a reliable and efficient way to build their portfolio, keep track of all their assets, and identify and manage risks. There are many platforms, software, and systems that can help you manage your business’ cash flow, with online banking options that offer an online cash management account. These services will help you identify wasteful and inefficient purchases and practices to cut unnecessary costs. They also keep track of business records in one central database, making it easier for businesses to monitor how they obtain, use, and get rid of their assets.
3.Alternative Credit Scoring
Before alternative credit scoring FinTech was introduced, there was a huge gap in the lending industry. This is because most lenders prefer borrowers with files that are richer in historical borrowing history data. Those with better borrowing history had higher credit scores, therefore immediately having their loans sanctioned. However, new entrepreneurs, startups, and fresh graduates with no credit history have low credit scores and are not eligible to apply for loans. Their inability to apply for loans in the first place prevents them from fixing their loans; keeping them stuck in this cycle forever. The problem is that this rigid method leaves no room for any other indication of a person’s creditworthiness.
Fintech, however, introduced alternative credit scoring to provide solutions for this problem. Alternative credit scoring uses a person’s digital footprint, along with other current and reliable data to determine a person’s creditworthiness. It allows people who were never able to enter the credit system a chance to get easier loans and faster access to the system. This is also beneficial for lenders because it decreases risks and gives them access to underbanked fractions of the population, broadening their options.
Digital wallets are software- and FinTech-based systems that store user’s payment information and passwords securely. The software also allows users to complete purchases through various payment methods and websites. For increased protection, digital wallets can create strong passwords and keep them safe so you don’t worry about the trouble of having to remember them. Digital wallets can also cross-function with mobile payment options and systems, allowing customers to complete purchases through their smartphones. Loyalty card information and digital coupons can also be stored in digital wallets.
FinTech solutions and products offer innovative means to track financial transactions and manage financial operations more efficiently. They have completely transformed the world of finance and continue to provide solutions to numerous financial issues and optimize frustrating financial procedures. They have helped many businesses, entrepreneurs, and individuals on a global scale by giving them access to incredible tools. Therefore, it’s safe to say that you won’t regret trying the above4 FinTech products.