In truth, it’s hard to quantify the value of the Fintech market due to its diverse nature and the pace at which it continues to evolve.
If you consider that the total value of global Fintech investments will peak at $35 billion this year (and rise further to $46 billion by 2020), however, you begin to see a growing market that has almost limited potential in the digital age.
Nowhere is this more evident than in the commercial market, where businesses small and large and leveraging Fintech to their advantage. Here are some of the ways, in which this technology is revolutionizing the world of commerce:
1. Negating Payment Terms Through Invoice Financing
In the world of small and medium-sized businesses, one of the biggest challenges revolves around cash-flow.
After all, startups can often be hamstrung by payment terms of between 30 and 120 days, depending on the industry in which they operate and the nature of the service that they provide. This can make it extremely difficult for companies to generate a viable source of revenue when they first start out while preventing them from taking on new work and growing organically.
However, companies like Touch Financial have developed an innovative online payment platform that connects businesses with invoice financiers in real-time, enabling them to seek out the best deal and receive the value of their invoice within 24 hours of submitting this. This type of innovation has proved even more important in the current economic climate, where startups are struggling to source financial through traditional channels.
2. Disrupting the Banking World for the Benefits of Businesses
It’s also fair to surmise that Fintech is disrupting the banking world, particularly when it comes to the process of lending capital to a commercial borrower or challenging the habits of consumers.
In general terms, this means that customers are now increasingly inclined to buy goods using their mobile device, creating an opportunity for firms to optimize their sales volumes with the right technology.
It is the emergence of Blockchain that is having the biggest impact on the banking sector, however, creating the potential for money to be exchanged and transacted through real-time ‘smart contracts’.
These contracts are completely transparent and can be executed immediately, while they also minimize the transaction fees often applied by middlemen. This offers significant advantages to entrepreneurs, particularly those who are looking to borrow money from traditional sources.
3. Creating More Secure Business Platforms
On a final note, it’s also important to note that Fintech is revolutionizing how businesses tackle the issue of cybersecurity, while also continuing to increase their online presence and move seamlessly into the world of mobile apps.
More specifically, Fintech is enabling companies to adopt a collaborative and adaptive approach, as they look to overcome the barriers that separate app designers and security specialists.
This type of approach is imperative in the digital age, particularly as hackers become increasingly sophisticated and continue to pose a genuine threat to businesses.
Given the fact that businesses will continue to move online and into the mobile realm over the course of the next few years, Fintech is clearly playing a crucial role in creating more secure and viable ventures.