Fintech is commonly associated with unicorn companies. But it is there to service a far wider part of the economic community as the recovery begins.
As the country emerges from lockdown and turns its attention to rebuilding the economy, one resource that is of crucial importance is Fintech. A complex and diverse industry that is of far more importance than simply serving unicorn companies, it provides an additional option for companies using more traditional sources of lending.
“Most companies are in need of financial assistance at the moment,” says Guy Bridge, CEO of Finpoint, an accredited delivery partner to the Federation of Small Businesses and Better Business Finance. “And, in general, Fintech tends to be more dynamic, more flexible and to deliver more qickly. Fintech does not have legacy systems to deal with: it is a brand-new way of financing based on a brand-new economy, on the back of new technology. As such, we can move faster than you would in a traditional organisation.”
Bridge is keen to emphasise the fact that Fintech is not necessarily an alternative to more traditional financing methods: rather the two can work in tandem, with SMEs turning to both for their different needs.
“Traditional finance is not wrong: it can provide competitively priced products that are what an SME needs,” he says. “We are happy to have a relationship with each other’s clients. But the relationship between Fintech and the clearing banks encourages a challenge to them through the use of alternative markets. In practise, the advantage of Fintech is the ability to move forward more quickly and to facilitate progressing business objectives more quickly.”
Fintech can accommodate different needs
And of course, there are many different types of Fintech depending on an SME’s needs, such as forex and cloud accounting. In addition to that, during lockdown, SMEs have become more accustomed to using digital services, especially to facilitate their tax obligations. “In HMRC, everything is digital,” says Bridge. “Digital facilitates the running of a company and will help it thrive.”
This article originally appeared in Business and Industry’s 2020 Fintech Campaign.
Guy Bridge, CEO, FINPOINT Limited