It is glaringly obvious that nearly every industry has been radically changed and disrupted (that buzzword again) by the increased integration of technology. While some of the implications related to technology are relatively straight forward and simple to understand, like expanding your business via the internet, some other facets can be slightly more complicated.
Financial technology, abbreviated as fintech, is a topic and idea that is, as we speak, is revolutionizing how organizations large and small treat, process, and understand financial processes.
Like any other new technology tool or platform, there is a lot of information, misinformation, and confusion as to what exactly fintech means, and whether or not it's right for your business. I have years of experience dealing with technology, integrating technology with corporate finance, and making sure different platforms work well together -- and it can occasionally feel like a whirlwind of information to me. Making the correct decision for your business, your customers, and your finances is not something to be taken lightly.
Like any other tool, fintech can either create a lot of value for your business or do a lot of damage -- you need to know what your business needs.
Let's drill down and discuss, from a finance and technology perspective, what you should look for as you start navigating the fintech landscape.
1. Understand what fintech is.
Fintech is simply another type of technology, but there is a certain mystique surrounding this topic. Whether it's the association many have with Bitcoin and other cryptocurrencies, some small business proceed with large amounts of caution before proceeding. Fintech can be as simple as enabling mobile payments with Square, but don't let this topic intimidate you.
2. Make sure it works for your clients.
This is often an overlooked point when organizations are considering adopting new technologies and technology platforms -- are your customers comfortable or ready for these tools? Just as every entrepreneur needs to understand what customers need, you must also be aware of how comfortable your customers are with using technology.
3. Understand if it works with your legacy technology.
You know as well as I do that, even if you are adapting new technology tools, payments methods, and data systems, they do not magically fix existing problems with your older systems. Before going all-in on a particular software platform or tool, make sure to analyze the implications of these new tools on your existing IT infrastructure.
4. Upgrade your technology security.
With every piece of fintech you are, of course, increasing the amount of information from your business that is digitally available. This makes it easier to access client data, respond to your businesses in real time, and expand your market share. On the other hand, as more information about your business is digitally available, you should make sure your IT security is up to par to deal with these increased demands.
5. Is it supported?
There are few things worse than going to the trouble, expense, and effort of installing a technology system, to only realize a year or so later that it is out of date and no longer working with new products and services. Making sure that your technology is supported by an established entity, and has customer support features available, will help spare you headaches down the road.
6. It's more than Bitcoin.
Bitcoin, the most high profile technology leveraging blockchain technology, does not represent the totality of what fintech can mean for your business. Don't lose sight of the other possibilities by just focusing on this.
Fintech is a term that you and I will be hearing more about in the coming years, and will eventually become a part of virtually every business. That said, it's easy to feel overwhelmed while considering all of the possible options, and it is possible to make a mistake that can have serious implications on your business.
Understanding what to look for, how to incorporate these tools into your business, and what to keep an eye on during the implementation process can help make the fintech adoption work better for you and your customers.