Financial technology (Fintech) has bridged the gap between suppliers and consumers worldwide. The technology has created a beneficial digital system that positively impacts both sides. This has improved the working capital and decreased or eliminated contract processing costs. The digital system applies to all sectors, from healthcare to the banking system globally. Fintech research shows increased investment in the Fintech industry. Statistics show $ 31billion investment deals in the last three years. The technology is also available for trading platforms. The many eToro reviews found online prove the huge impact Fintech services have had on stock trading platforms. The digital trading platform plans a merge with several Fintech services to improve cryptocurrency trading.
Fintech companies venturing into the supply chain are acting as digital procurement brokers. The companies use various bank networks to offer the best trading financing terms. Fintech companies rely on different structures. However, the process starts with the buyer and ends when the supplier is paid. Fintech can use techniques such as being the intermediary. For example, the supplier can be paid within 5-10 days, and the buyer to pay within 120 days but still under the same agreement. The buyer is dealing with the Fintech Company. They receive low processing costs due to the automated system introduced by the Fintech system.
Fintech Solutions in Supply Chance Finance to Buyers
Best improved working capital using extended accounts payable. Lower processing and administrative costs.Improved financing terms and streamlined procurement process.For suppliers they get the payments on time, thus improving service and product delivery.
Corporate Funding Incentive
Since the introduction of Fintech and the benefits they offer on different platforms. Most corporations (1 out 4) are utilizing Fintech systems to run their supply chain finance platforms. Before Fintech, supply chain finance was conducted by banks. All Companies were limited to banking options and terms. Today the supply chain finance platform can use Fintech to connect to a network of banks and financial options. The Fintech solution provides flexible services such as automated currency exchange. The corporations can provide more working capital and procurement process to new industries.
SME Global Impact
Fintech solution is available for small, medium, and large corporations. Technology offers equal opportunities to all business sectors. Research from international financial Companies shows the most significant growth of Fintech (supply chain) is from SMEs. In the past, financing SMEs was challenging and required documentation, verification to receive business loans. However, Fintech has improved the loan process services and duration. SMEs can increase their production due to proper funding and automated services. SMEs can merge with large banks through Fintech platforms and get better financing and financial knowledge.
Healthcare Opportunities
Fintech solutions aren’t limited to manufacturing or banking industries. The Healthcare industry still underestimates the power of Fintech in improving their services. The majority of hospitals use the primary system to enhance their supply chain. A survey from Syft indicates that many healthcare facilities (98 percent) believe supply chain management works for medium high priority investments. However, the incorporation of Fintech solution will save more than $11 million annually compared to the essential supply chain cost.
Hospitals should invest in Fintech service to get automated service which will reduce management cost. Lack of a digital system for hospitals will increase the cost as more human resources are required. Fintech platforms can help automate procurement costs. Fintech platforms also help connect health practitioners with patients, especially during the current pandemic situation.
Future Issues
The traditional banking system follows particular regulatory protocols based on the region’s government. Fintech is facing regulatory issues since each country has its rules—this hinders many companies from investing in Fintech SCF. However, Fintech platforms are working on handling the regulatory issues to suit all businesses.
Conclusion
Companies should implement technologies that are cost-effective and improve their business productivity. They should also concentrate on risk management to curb all potential risks.
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