Over the past decade, financial technology [fintech] has become increasingly popular among businesses working to reduce costs and streamline operations. With the pandemic forcing workers to conduct many of their daily tasks from home, adoption of these technologies has accelerated.
Quarantine Further Reducing Cash Usage
While technologies like Zoom and Slack have filled a void in coworkers’ collaboration, other fintech innovations have been solving issues with cash management. For example, brick and mortar retail shops have adapted by focusing on e-commerce, and fintech companies like Shopify are helping small businesses make the transition quickly. The shift toward more online transactions means more electronic transactions and smaller cash receipts.
Another trend impacting the use of cash is an effort to reduce the number of physical touchpoints in business transactions for safety. This means businesses that have traditionally relied on cash are feeling pressure to make the shift to electronic payments, even when their operations are mobile, and cash is the most convenient. Fintech companies, like Square, have mobile payment solutions that leverage smartphones or tablets to process credit cards, and this has allowed many cash-only businesses a smooth transition to electronic payments. Prior to the pandemic, cash usage had already been dropping in favor of credit and debit card transactions, but the recent shutdowns have worked to accelerate this trend.
Possible Final Blow to In-Person Business Banking
While meeting with a banker in person may still be the preferred option for some businesses, most operations can now be performed electronically. Brick and mortar banking was already trending down, but the pandemic shutdowns may have been the end of traditional branch banking for many businesses. In addition to more payment processing taking place online, many other banks’ operations are being disrupted by new fintech.
Fintech companies, such as PayPal and Kabbage, also stepped up to the plate when traditional banks couldn’t handle the volume of PPP loan applications in 2020. This is because larger banks, more accustomed to in-person lending, struggled to adapt their technology to provide government-backed loans. On the other hand, fintech companies were able to develop the technology and scale it quickly. Further, many new non-bank lenders in the small and medium enterprise (SME) market are utilizing fintech to provide more funding options to business borrowers. Companies like Tyro and Prospa can provide access to loans in under a minute, a credit to their AI-assisted scrubbing of accounting software and financial statements.
For companies that maintain large cash reserves, fintech allows businesses a simple way to protect their cash while earning competitive returns. At the American Deposit Management Co. [ADM], that’s exactly where we excel. Our American Money Market Account™ [AMMA™] provides businesses access to unlimited deposit protection and the most competitive return available. To learn more about how an AMMA™ by ADM can help your company streamline its cash flow management, contact a member of our team today.
Escrow Services Provide Protection for Industries Experiencing Uncertainty
Certain industries, like live entertainment and healthcare, have been heavily impacted by the pandemic, albeit in different ways. Most live entertainment events like concerts, movie theaters and sporting events have been greatly restricted or shut down completely due to the pandemic. On the other hand, hospitals and healthcare providers have seen short supplies of critical equipment, made worse by shipping delays and overwhelming demand for their services. When critical orders don’t arrive or events get canceled, it can create real problems for everyone involved.
This type of uncertainty has been wreaking havoc on operations, especially for businesses that don’t protect themselves. ADM, has leveraged its proprietary fintech to develop an enhanced business escrow offering that provides the necessary protection for businesses operating in uncertain environments. To learn more about our fintech enhanced business escrow services, contact a member of our team.
Fintech of the Future Coming Soon
While the pandemic has accelerated the adoption of current fintech, the next innovations may already be on the way. For example, with more electronic payments comes the need for more security. Biometric authentication is already attached to many consumer financial technologies, like mobile payments, and it may be coming to more business transactions in the future.
Another example, Blockchain technology, is most recognized for serving as the backbone to cryptocurrencies, but it is being rapidly integrated into other business services. Because blockchain is a decentralized and immutable ledger, there are endless possibilities for its use in finance, so expect this technology to be a part of many future fintech advancements.
For better or worse, 2020 saw many businesses adapting to a drastically different atmosphere. And while much of the economy should eventually return to normal, there is no indication that the adoption of new financial technology will reverse.
Fintech is at the heart of ADM
At ADM, we have proprietary financial technology that will help your business manage cash flow and maximize returns while securing FDIC / NCUA insurance coverage for all your cash. Another way we’ve leveraged this technology is by creating a business escrow service that earns nationally competitive returns for your protected cash. We’ve also utilized our fintech to automate the vendor payments process, which takes the stress out of project management.
Want to learn more about what fintech and ADM can do for you and your business? Contact one of our friendly associates today.