The revolution in fintech during the last decade has made incredible advancements in financial services available to even the smallest of businesses. From digital banking to online accounting software, SMEs have been able to tap into a growing number of feature-rich, affordable tools to manage finance effectively and grow better, more agile businesses.
The ‘ABCD’ of fintech – artificial intelligence, blockchain, cloud computing and big data – has already transformed financial services and catapulted some fintech companies beyond traditional banks and platforms that have struggled to keep pace with the march of new tech. However, even as disruptive as fintech has been, the current offerings are only a taster for what could unfold in the next 20 or 30 years.
This is evident because many firms are now only just switching to digital software for accounting and payroll tasks. The Making Tax Digital (MTD) scheme in the UK is part of HMRC’s ambitions to be a global leader in tax administration and the government’s target to make managing and paying tax easier for freelancers and businesses.
Key to the MTD initiative, which launched in 2019, is bridging software, a tool that creates a digital link between a business and HMRC so that it can start reporting tax digitally. Sage is at the forefront of the fintech boom as it offers a range of products and solutions that support “the ambition of the world’s entrepreneurs”.
These ambitious entrepreneurs are more tech-savvy and unwilling to adopt older technologies based on outdated models. As these entrepreneurs demand better software and cutting-edge features, fintech will continue to evolve to serve them while integrating new forms of exciting technologies.
Global consulting firm McKinsey recently listed seven “key technologies” that will be at the forefront of fintech during the next 10 years, with AI, blockchain and cryptocurrencies, and cloud computing still being refined and new advancements in the form of IoT and “hyper-automation” taking things to the next level.
AI is of particular interest in fintech as McKinsey believes that it could add $1tn to the value of the global banking industry with use cases varied and wide-ranging and it having an impact across “front, middle, and back offices”. Privacy and security, chatbots, automation and data analytics are among the tasks that will be transformed by AI.
However, it will be the fintech companies leveraging these technologies to serve businesses that will thrive. The products and services offered by Sage, for example, highlight how it is possible to move faster and react to changing regulations and initiatives such as MTD, overhaul financial processes and reduce the burden of admin.
In contrast, traditional financial institutions are often hamstrung by older, legacy systems, which make it difficult for them to be truly innovative. Fintech companies will fill this space as they bring new products to the market by acting faster and capitalizing on new trends and opportunities. For now, we have only scratched the surface and businesses can expect many more exciting developments in fintech as the industry gets closer to realizing its potential.
Rupali Gupta is a blogger and professional writer who loves to write about technology and entertainment. Techzimo is one of her successful websites filled with great tech news, Know more about her on Youtube Facebook Twitter Linkedin Instagram