How technology can be incorporated to meet the financial requirements of a business

Apr 10, 2020 by

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Technology has seeped into every aspect of human society, especially in the last 20 years it has gone global. All businesses are dependent directly or indirectly on technology for their production, distribution, and marketing. The same way technology has also become important in the financial department of a business. 20 years back if you needed money for your business you had to turn towards a bank or an investment firm, who would lend you money only if you met their strict criteria and already devised models. It was leave or take it situation, without any concept of catering to the specific needs of the clients. People were completely dependent on their financial adviser, and even after that, it took weeks to get a loan approved that too only if you got all the paperwork right. Technology has replaced the paperwork with financial programs and paying for financial advisers with robot-advisers which are algorithms. Technology can be utilized in a multitude of ways to solve the financial problems of a small business. Following are some of the ways:

  1. Online money lending services:

There are numerous companies with an online presence who lend money to businesses which do not qualify for the loan programs of banks or formal investment sector. These independent loan providers are backed by at least one bank. Online money lending services or loan providers have artificial intelligence programs that asses your business activity through data available online, like the sort of traffic, reviews and client base your business has. They also verify your financial statements, revenue, and credit score. All this information is processed pretty fast through AI, and you can usually receive the loan within a few days. Another thing that has made online business loan providers in US appealing among the loan seekers, is that they have numerous types of loan programs. Ranging from short term loans, one-time cash infusion, loans for specifically buying equipment, and many more, this range helps businesses get the sort of money they want and fast.

  1. Financial Advising Algorithms:

Banks provide financial advisers to advice on how to best invest the money you have and what sort of financial decisions will help flourish your business. To qualify for a financial adviser you need to already have a certain amount of capital. Moreover, financial advisers are expensive. Algorithms have been developed that analyze the market trends using mathematics and compute it using statistics. These algorithms drive results and make a prediction based upon the available data. The more data available to these algorithms the better results they show. Many businesses and young people have turned to these robot-advisers. They are also much cheaper than the financial advisers for whose service most people do not qualify nor can afford. Robot-advisers do not have much human interaction involved and can be a bit clunky to use but with the millennium’s familiarity with technology and ease has made them a popular product to use while devising financial decisions.

  1. Digital Banking:

Cash is very much still in use and won’t be going out of fashion anytime soon. However, how money is spent and used has changed a lot. Many businesses conduct their business online, the internet is the medium they use to sell and market their products. That means the people who buy their products are not people who can walk into their store and purchase the product with cash. These people will most likely buy their products through a direct cash transfer or a credit card. Online banking and digital transfers and transactions have made the payments faster for businesses. They do not have to wait for long to get money and hence are less likely to have pending payment problems from clients. Also, it has expanded the client base. Systems like Visa have made this possible. Digital banking has reduced the number of trips to banks, the presence of ATMs has made access to cash available 24hours. All digital transactions also can easily be tracked and digital records can be created hence saving the business owners from keeping a paper record of every financial receipt.

  1. Big Data:

Big data is a technology on which a lot of work is being done. Though it isn’t perfect and is based upon the information fed into it and not facts, hence there are certain hitches and problems in it, however, big data is changing the scenario for the business owners. Through big data technology, large amounts of data can be processed to predict consumer trends for the future. The spending habits of different age groups, in different regions of the globe, can be assessed through it. Based on this data a business can invest in their expansion, they can invest in a marketing campaign directed towards the specific demographic that is more likely to consume their product. Big data technology can predict the needs and wants of the people in the context of their current consumption habits. Because this information has become available to businesses they can make safer economic decisions.

  1. Blockchain and data security:

Keeping the financial and personal information of business safe and secure is extremely important. Identity theft, data theft are some of the biggest fears of a business owner in this digital age. People hacking the system and transacting money from a bank account or stealing financial information and using that to transact money has happened multiple times. This has initiated multiple security programs that are designed to keep your financial and personal information secure. Many a time after a theft it became hard for the victim to prove that it wasn’t him who did the transaction because the information was manipulated or made unavailable. The blockchain technology is the solution to that. It hasn’t become global yet but it and programs of its likeness are already being used for financial security. Blockchain replicates the original information and stores it in multiple places, hence even if there is a manipulation of data at one place or theft, it can be easily verified a d recovered from the other sources. Blockchain is most useful for small businesses that can’t afford huge security systems and at times are not sufficiently equipped to deal with financial security threats.

Summation:

Technology has evolved fast to support the capitalistic market, so most technology is first designed to meet business requirements and it’s possible needs and it is later modified to cater to the individual and domestic consumer base. The financial department of any business is its blood. Finances need to be flowing fast and smoothly for the business to flourish especially in the 21st century where everything is moving at such a fast pace, it is obvious that the financial sector has to be tech-savvy to keep up with the pace. Technology has made it easier for a simple businessman to handle his accounts ably through the availability of different applications that keep track of finances.

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