Setting Up Your Business: The Fintech Advantage

April 01 2019

Setting Up Your Business: The Fintech Advantage

 

When you think of setting up your business, it may be difficult to envision things beyond the bigger picture at first. If you don’t consider it, however, then it will have a massive impact on your capacity for growth. Luckily it’s no longer difficult to find the tools to help your growth—we are equipped with so much technological innovation, made possible through our smartphones and laptops. A special branch of this innovation, FinTech, has played a crucial role in making finance for businesses and individuals alike a much simpler tax. In this industry, they’ve created service that range from payment apps to AI and big data.

According to Accenture, investment in fintech worldwide increased from $930 million in 2008, to over $12 billion by the start of 2015. These figures are only bound to continue increasing, because FinTech encompasses all businesses and interactions that deal with money. FinTech is the breath of fresh air that will help revolutionalize financial institutions.

Promoting Cost-Efficiency In Businesses

Financial institutions have a hard time expanding to several places to cater to different audiences, especially when it comes to setting up a physical space. The additional operational costs incurred in the expansion are then accounted for through high banking fees to individuals and business. It is because of this setup that the capacity for economic growth and social welfare has not been maximised, since banking services have traditionally come with high transaction costs and poorly designed services.

On the part of non-financial companies, they have the opportunity to ride on the FinTech wave in their own ways as well. Mobile wallets like the Emirates Digital Wallet or the Google Pay play a part in making transactions more efficient and less time-consuming for both sides.

Financial Literacy And Inclusivity

A financial system heavily dependent on cash and overly strict KYC rules have been two of the biggest reasons as to why many people in the Middle East lack access to crucial financial services. They are unable to access imprortant services such as capital and credit because they are too far away from banks that could give this to them, or they simply do not know.

When transactions can be made over smartphones and apps, it doesn’t just help businesses and banks save up on the costs of establishing a physical space – it also becomes more accessible to more people, especially women and the youth. In this way, FinTech is helping secure more financial inclusion because it beings these services closer.

SMEs And Funding

Low transaction costs have made peer to peer platforms possible. Here in the Middle East, a company named Eureeca secure the first equity crowdfunding licence and works to let investors fund startups in exchange for equity. Another solutions provider, Emerginc Crowd, gives investors the opportunity to buy shared and bonds in emerging-market SMEs.

These platforms are helping lower the barrier of entry into what was once a super competitive market, dominated by only the top companies in the industry.

These platforms help lower the barrier of entry into the world of innovation and entrepreneurship. It empowers people to turn their dreams into reality, as well as push their businesses past the birth phase and into the growth phase.

Artificial Intelligence As Advisers And Consultants

Firms are trying to apply FinTech through “robo-advisers” that use algorithms to develop investment strategies for investors. The accuracy of these AI calculations means they are becoming integrated into the core component of investment firms’ business models.

In China, mid-sized banks are testing robo-advisers on their online wealth-management platforms. This model could soon be seen in MEASA banks as well. In this way, it could help overcome some of the vulnerabilities in the mainstream financial system. It can reduce the risk of human error while allowing you to obtain more tailored investment solutions for your portfolio.

There’s more to expect from Fintech as we continue to develop ways to help close the loopholes in setting up businesses and providing stable customer experiences. We have a lot to look forward to! Stay tuned!