Navigating fintech and alternative finance
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Until very recently, anyone looking for a business loan would have automatically turned to their bank, but this conventional route to finance is no longer the only source of funding for SMEs. The emergence of fintech (financial technology) and altfi (alternative finance) has transformed the way SMEs access capital.By Lisa Walls-Hester, finance broker, Compare My LoanTechnology and innovation is fuelling these new players and we are seeing new platforms launch on a weekly basis. According to a report by the global consultancy firm, Accenture, the industry is growing by 67 per cent year-on-year.
The fintech phenomenon is sometimes referred to as the ‘Fourth Industrial Revolution’. In the last few years it has upended traditional lenders by democratizing finance and levelling the playing field for all participants in the industry.Fintech has made borrowing faster, cheaper, and more abundant, but on the downside, it has also added new layers of complexity to an already hard to navigate industry.
Time pressed CFOs and business owners don’t have the resources or the inclination to navigate hundreds of platforms to find the best deal. Instead of making brokers obsolete fintech has only served to make their participation in the sector more vital than ever before. Having a specialist on hand to cut through the noise and find the best products and offers with deep knowledge of the entire marketplace is fundamental to finding the right commercial finance solution out of the hundreds on offer.What is ahead for fintech? The UK is a centre of excellence for fintech, with London frequently declared the fintech capital of the world. This means British businesses will continue to be the global testbed for new platforms and products. Several banks are in the process of creating an amalgam with some fintech platforms and so ‘hybrid products’ and ‘partnerships’ between these new players and traditional lenders are the watchwords for 2017.