How to Match the Relevant Fintech with your Business

Fintech is everywhere these days, and with good reason. Since the banking meltdown of 2007, huge enterprises and SMBs alike have been looking for other alternatives to the traditional financial infrastructure.

Today, Fintech can do what most traditional financial infrastructure can do. In its various forms, it can act as a payment of system (POS), provide loans, convert currency, manage investments, and function as a gateway for cashless transactions. It even has its own borderless type of digital currency.

Selecting which service is relevant for your business is just as tricky as choosing the right bank. There are many factors to be considered. Like the banks, some Fintech might be more compatible with your business than others.

First, knowing and understanding the various categories of Fintech is the first step. Coinspeaker enumerates the more popular ones:

Cryptocurrency: a digital currency that is used to pay transactions and smart currencies in an online, transparent, decentralized ledger, without the need to go through a central bank. Bitcoin is the most famous example.

InsuranceTech: Financial planning and management are done through apps, smart devices, and the Internet of Things, with very minimal interaction through a human agent.

LendingTech: Machine intelligence verifies the credentials of consumers asking for a loan, such as assets and payment track records, with greater accuracy while cutting through the bureaucratic red tape.

PaymentsTech: Paypal is one of the founders of this category. Payment is performed through digital processing that sends funds from one online account to another. The money can also be transferred to the user’s banking account.

TradingTech: IT systems facilitate international trading for consumers and organizations alike.

Robo-Advisors: Investment newbies consult with AI consultants, instead of human ones, as they start and maintain their initial professional investment portfolios.

Stock-trading apps: Buying, selling, and trading stocks in the stock market can be done through several clicks on the smart devices. The user can monitor which stocks are rising in value, and which of them are dipping. They can then unload the stocks they want to dispose of, and snap up the ones they think are worth it, without the help of a human stockbroker.

WealthTech: This Fintech is more applicable for seasoned investors as well as organizations that want to manage their investment portfolios. Hefty, long-term transactions are streamlined, and financial operations across regions are made more efficient.

Equity funding. Start-ups and companies ripe for expansion have more direct access to potential investors through digital communications. Crowdfunding opens up their reach to the general public who, through a digital platform, can contribute in return for shares in the organization.

Identify your requirements

Next, you have to identify the various needs that your business requires now—and then learning more about the specific categories that can respond to those needs. For example, will your company need access to a series of loans in the near future? Or do you need a POS to transfer monies to you from new markets that do not use a lot of credit cards?

Discuss the requirements with all your managers and department heads, and make sure everyone is on the same page. (They should have studied Fintech the same time you did.) One manager’s idea of what they need could be different from their colleague from a different department.

Grade your requirements in order of priority. Get a consensus on how important a particular feature or functionality you need, including the core requirement.

Create a scorecard. Organize those requirements and their corresponding “graded” priority into a list. Some criteria may seem secondary, but they are actually more important than your core requirement. For example, Coinbase and Trezor are great e-wallets for Bitcoin. However, your business may operate where their service is not available, e.g., Japan. Then, it doesn’t matter if they offer the most-secure e-wallets with great features—they still would not be equipped to help you.

Create a separate list per core requirement – Once you have your scorecard ready, it’s time to evaluate each company that fulfills your core requirements. Get inputs from each manager.

The search begins

One thing you have to remember about Fintech companies: most of them are specialized and will not have a wide range of services comparable to an international commercial bank. Drop the idea of attempting to find a one-stop-shop, but instead focus on finding the best relevant company that can respond to your specific need.

Once you have a list of companies to evaluate and a scorecard to judge them, you can begin looking for the Fintech that’s best for your business. Search for two to three brands per Fintech category. Here are the steps.

Grade their reviews. Customer feedback is searchable on the web. Reading up on their background and online reputation will get you past their marketing spiel. Review sites that offer relevant information on a particular brand help determine if the brand does deliver on their promised services.

Watch their usability demos. User experience is always a relevant criterion. A lot of Fintech companies upload their usability demo and user tutorials online. Those demos can fill up your scorecard to help you study their services more closely.

Discuss the top finalists with your managers. Your scorecard will say which category or brand is most relevant for your business, but there are times when the race is close. Discussing the final selection with the group that created the requirements may help your organization arrive at the best option.

The last step

Get your entire team, not just the managers, to support the new Fintech that is being installed in your infrastructure. Ask vital support from your provider. Training and consultation for a few months will help your teams learn and work with the new tech. Obtain feedback from your clients.

Finally, establish a set of metrics to assess how effective the new Fintech has been to your organization. Did it deliver on its services? Did it make payments and transactions more efficient? Did it safeguard your data? Did it enlarge your market share?

Discovering and deploying the Fintech that matches the needs of your organization is the first step. Maximizing its potentials to make your company stronger is an altogether different journey.