Startups Are Now Choosing FinTech Over Traditional Banks For Personal Finance

Blockchain, FinTech, Opinion | October 21, 2020 By:

Starting up a new business means that an individual has to cross several obstacles before the business can actually reach stability, break even and start realizing profits. From tough market competition to funding challenges, new business owners have to have tremendous ambition, grit and determination to handle it all. But this age of digitalization has become a blessing in disguise with an abundance of tools, technology and financial innovations for startup entrepreneurs. 

FinTech Benefits: Here are the top five benefits which startup owners and micro-organizations can get with FinTech solutions.

  • Flexible lending solutions

The traditional loan approval system via mainstream banks has generally been perceived as a tedious process that includes tremendous amount of paperwork, multiple in-person verifications and less surety of receiving a loan. The main reason for this has been that banks primarily rely on credit scores to judge an individual’s eligibility to receive a loan. This approach works well the ascertain the eligibility of established businesses and individuals, but the same approach does not suit startup owners and SMEs. 

The FinTech industry has changed the game of lending solutions options for small and medium sized firms. Individuals who had to deal with rigorous screening processes are now able to apply online with seamless procedures, quick approval systems and easy loan disbursal processes. Small business loans through FinTech solutions have become a far more easier process which helps entrepreneurs concentrate on what truly matters – their business. 

  • Modern payments

Digitalization of payments has changed the game of how companies do business. With a staggering growth of digital payments by 12.7% CAGR in the number of non-cash transactions in India alone, it is certain that the trend is on an upward rise. And this is levelled the game for startups. Small business who did not have the resources for the high end payment solutions offered by banks, can now afford the easy to implement and cost friendly solutions like Direct Debit functionality, Faster Payments, etc. offered by FinTech. 

  • Better customer experience

The core USP of Fintech is its focus on customer interaction and user experience throughout the transaction cycle. With everything going through streamlined online processes, there is an increased level of transparency and efficiency. And the use of artificial intelligence only enhances the customer experience further by offering a personalised touch. For example, automated chatbots have been seen to provide customers with 24×7 assistance, something which was never imaginable with traditional banking methodologies. 

  • Innovative financial tools and services

Finance functions which were once a lengthy, personnel-oriented process have now been replaced by bespoke FinTech solutions. From payroll software that provides smooth solutions to help employees have a seamless experience in managing their attendance to accounting software customised for an organizations need, financial tools and services are playing a major role in helping businesses boost their productivity, save time, resources and energy.

  • Increased security

Lastly, the bottom line that defines the efficacy of any financial product is the layers of security that it can provide to enjoy the trust of their customer. Mobile payments, which were once looked upon with sincere scepticism, are now wholeheartedly welcomed. The main reason for this development is that FinTech companies have invested high time and energy resources in developing this foundational aspect of the system. Moreover, small businesses who were earlier unable to opt for cyber security systems owing to their cost, are now able to so.

The bottom line – FinTech is the future, and the time to adapt to it is now. It is instrumental in helping a small business gain a levelled playing field with honchos. And also customers, who are now able to enjoy the best of both worlds – advanced technology with a far richer customer experience.