Five fintech innovations making business easier
The New Rules of Money
Fintech is showing no signs of slowing down in Asia Pacific, with the market in this region expected to hit $72 billion next year. As fintech has grown from niche players into a major industry, the trend has moved from new businesses acting purely as disruptors to an environment where fintechs and incumbent companies work together to deliver game-changing commerce experiences.
While many fintechs in the spotlight over the past few years have been recognised for innovations that impact consumers, there is a range of companies that are transforming the business-to-business landscape. From how businesses pay each other to how they source new employees, fintech and corporate collaboration is making it easier to get business done.
“Ultimately, businesses of all kinds are run by people, and people want the same tech innovation at work that they have in their lives as consumers,” says Vikram Kshettry, Visa’s Head of B2B Partnerships and B2B Connect, Asia Pacific. “Fintechs are helping bring the lounge room into the boardroom and solving business challenges in new ways.”
Here are five fintech innovations exemplifying this trend:
1. Plug-and-play Payments
Accepting payments can be a surprisingly complex task. What is a simple exchange of value, quickly becomes complicated online. Different payment methods, different technical systems and preferences all add to the complexity of payments in the internet-driven economy.
This growing challenge has sparked a search for simplicity, with established players and new entrants all making a play to streamline payments for every type of business.
Stripe Connect is one example. Connect offers multi-sided marketplaces and platform companies the ability to accept payments from anywhere in the world, and settle payments with sellers and service providers in more than 25 countries in over 135 currencies.
What really makes Stripe Connect stand out is its library of pre-built and customisable UI components and APIs. These help reduce development time by providing the building blocks to create a tailor-made payment solution and integrate it with a company’s existing digital platform. This flexibility makes the technology accessible to a wide range of businesses, taking them from local to global in a whole new way.
2. Leveraging Loyalty
Acquiring new customers is often said to be five times more expensive than retaining existing ones, yet building customer loyalty is easier said than done. “Many firms today are wasting half their marketing expenses on disloyal customers who will never stick around long enough to pay back the acquisition investment,” says Fred Reichheld of consultancy Bain & Company.
The challenge is identifying potentially loyal customers based on the volume and variety of data the companies have access to.
One of the many solutions tackling this problem is Singapore-based loyalty and customer engagement platform Perx. This machine learning powered software-as-a-service (SaaS) platform analyses data from a company’s marketing campaigns in real-time, providing insights into campaign effectiveness, breaking it down into spend vs. return, and turning large volumes of raw data into actionable recommendations.
What really sets Perx apart, however, are its innovative and customisable engagement and loyalty platform, allowing companies of any size to not just identify, but to immediately target and nurture loyal, dormant, or new customers with the right kinds of communications. Perx is also making the most of the gamification trend, with features such as digital scratch-cards, stamp cards, spin-the-wheels, leaderboards, and other interactive engagement methods.
By combining customisable loyalty programs and real-time data analysis, companies can hold onto their customers by targeting them with timely, tailored and relevant offers.
3. Alternative Financing
Peer-to-peer (P2P) lending typically refers to digital marketplaces through which companies or individuals can borrow money, provided by other individuals or companies, e.g. their peers. P2P loans are often unsecured, meaning that the borrower does not require any capital, and a borrower’s creditworthiness is typically less of a barrier to borrowing than when dealing with a traditional bank.
Regulators were initially slow to adapt to this booming new sector, which led to some issues for early adopters. With regulation now catching up, and with it the confidence of both investors and borrowers, the sector is seeing a boom of interest and participation.
In Singapore for example, all P2P lenders are regulated by the Monetary Authority of Singapore, with currently 55 companies operating in this space, according to the Singapore FinTech Directory. One of the biggest is Funding Societies. According to its website, the platform says it has provided over SGD 375m (USD 275m) worth of crowdfunded loans across three markets - Singapore, Malaysia and Indonesia - with a 1% default rate as of January 2019. The Asian Banker heralds Funding Societies as “the largest small and medium-sized enterprise digital financing platform in Southeast Asia with among the lowest defaults.”
This new, regulated type of alternative financing presents businesses with much greater access to capital, helping them fuel growth as well as navigate periods of tightened cash flow.
4. Talent Sourcing
Recruiting the right talent remains a time-consuming task for businesses, even with the advantages of online tools.
Businesses still have to wade through piles of applications and hiring managers often have to rely on, at least in part, gut instinct, as to whether a new hire will suit their business and stay long enough to make the hire worthwhile.
The human aspect of hiring is increasingly being complemented by AI-powered decision making. For example, with ZipRecruiter, the fast-growing online employment marketplace, rather than just posting a job ad and waiting for people to apply, ZipRecruiter uses AI-driven matching technology to actively invite relevant candidates to apply to jobs. As applications come in, rather than having them simply pile up in an inbox, ZipRecruiter highlights the most relevant candidates. As businesses continue to use the site and “like” certain candidates, ZipRecruiter learns their preferences and uses this to help find other similar, relevant candidates, helping save the recruiter’s time whilst increasing the likelihood of making the right hire.
5. Beyond Payroll
Managing payroll can also be a complex time-consuming process, particularly when dealing with sales commission, annual bonuses and regulations across different countries. For SMEs that follow a do-it-yourself approach, this process can often prove to be complex, time-consuming and prone to human error.
Cloud-based payroll solutions have already been available for years, but today these solutions are tailored to specific countries and regulatory environments, helping non-experts keep their business running smoothly. Solutions are now also coming with optional modules to expand their functionality to cover other business functions such as employee records, leave applications and expense claims.
HReasily is one such cloud-based solution. It comes optimised for mobile devices, conveniently helping both business owners and employees to manage a wide variety of business functions wherever they are.
What often holds companies back from adopting these types of solutions is a resistance to the up-front costs associated with change, particularly if their payroll and other functions are seen to be working well enough, regardless of their inefficiencies. Whilst each company’s situation is unique, many solutions come with free trials, allowing companies to test aspects of the software and see how much time it can save them before deciding whether to fully adopt.
*Screenshots and screen flows are illustrative only. All brand names and logos are the property of their respective owners, are used for identification purposes only.
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