Globally, FinTech is seeing significant growth. Over the past year, FinTech companies have seen a significant increase in number. Different countries reported an increase of 14%. FinTech is addressing a gap in the market for traditional financial institutions that were left behind. Ann Marie Puig is an expert in global business and eCommerce, and believes that small and medium-sized companies (SMEs) are changing their operations.
It is important that we celebrate FinTech’s growth. Many others have also benefited from FinTech, including SMEs. FinTech’s ecosystem is made up of two segments: payments and lending. This is especially relevant for small and medium-sized enterprises (SMEs), as they have struggled for years to access credit and other financing options. This is often why they cannot grow or become bankrupt.
Puig explains how this sector of financial tech companies could play a decisive role in transforming SMEs. They provide them with credit, payment methods, and other services that they can offer their clients.
SMEs can now access credit that was not available previously. The credit process and interest rates offered by FinTech allow small and medium-sized companies to get loans that would otherwise be impossible to obtain from traditional banks. Commerce is the future. FinTech allows SMEs to use cards as payment.
Digital banks are on the rise and there is a wide range of wallets. People are turning away from traditional banks because it’s no longer necessary to deposit money or make payments.
FinTechs are capable of doing everything traditional banks can, but they’re not doing it. These companies are disrupting how credit is delivered and paid. Castillo explains that SMEs should use FinTech to challenge the status quo. Many times, small and medium-sized businesses find a niche and have difficulty expanding beyond it. This is exactly what Castillo explains. They don’t challenge the status quo.
The world, markets and consumers are moving. SMEs must join this train. FinTechs should also learn from them how resilient they can be; SME owners can withstand a lot.
No matter what, SME owners will always help them to get back on their feet. There are many startups that fail in FinTech ecosystems. Nobody seems to care. This is where anyone can make a mistake. They must possess extreme resilience and a clear vision in order to succeed.
Puig adds, “Just cause FinTech exists doesn’t mean that SMEs will stop traditional banking. It is a bit naive to believe so.”
Many SMEs are still skeptical about the potential benefits of FinTechs. We are still in the trust phase. Mutual trust will grow as SMEs become more digitally-savvy, more agile, and FinTechs prove their ability to operate in a responsible manner.
This trust is also reflected in the so-called FinTech Law. It has been established in several countries. This law legitimizes these companies and lays the groundwork for understanding that money that SMEs withdraw or take in is only from safe and regulated institutions. FinTech and SMEs have become more compatible than ever.
