How you can take advantage of the FinTech revolution. 

Money matters: UK businesses are going to experience a huge change Credit: Shutterstock

FinTech – the technology that underpins everything from transferring money to lending and accounting – used to be built around the needs of big businesses. Now, however, it is easier than ever for smaller businesses to use disruptive new technology to find and engage with trading partners, gain funding and utilise data to maximise sales and customer retention.

Why should your business get involved now? Partly because the UK’s businesses are about to enter a time of huge change. In a post-Brexit world, being competitive globally will be more important than ever, and FinTech can help you to make the most of that.

International trade opportunities

If you’re already exporting or thinking of exporting, the current weakness of the pound makes UK exports much more attractive to overseas importers. However, finding trade partners, ensuring that trades are settled in many different currencies and mitigating currency risks are all concerns for smaller businesses, while traditional ways of transferring money overseas can be expensive in small amounts.

FinTech has the power to make a huge difference to this. A recent report from the World Economic Forum said the FinTech trend “has the potential to become a game-changer for small businesses”.

“Because FinTech solutions are efficient and effective at lower scale, small businesses will be one of the main beneficiaries of FinTech’s disruptive power,” the report said.¹

What’s more, the FinTech industry is booming, with global investment in the sector soaring from $930m in 2008 to over $12 billion in 2015, according to an Accenture report.²

Cross-border trading functionality

Many new FinTech platforms such as WU Edge from Western Union are specifically designed to give smaller companies the same functionality to support cross-border trading as larger corporates. Because they are largely cloud-based solutions they are relatively simple to integrate into your business and require little to no ongoing IT support. What’s more, they are radically reducing the costs of doing business.
Edge stands for “Enterprise Digital Global Exchange”, and WU promises it will make “buying and selling overseas as easy as trading across the UK”. It lets businesses easily connect with overseas suppliers and customers through a central platform, setting up invoicing and payments while mitigating the cash flow and profit risks associated with trading across multiple currencies.

Managing exchange rate risk

As the UK establishes new trading relationships with the EU and the rest of the world currency volatility will be inevitable. Until recently SMEs have lacked the tools to mitigate this.
They can now ensure they know the true cost of the international invoices they pay and the true value of the contracts they gain, by using tools to manage their FX risk in the same way as larger companies.

Connecting partners

As well as providing this much- needed service, Edge is all about connecting potential trading partners with one another. Companies can create a network profile and find new trusted international partners – particularly important in the wake of the Brexit vote. It already supports 51 currencies in real time.
As Western Union says: “The ‘net effect’ is an unparalleled ability for SMEs to trade internationally.”