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Fintechs weather the storm: How disruptive technology is driving change

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A rollercoaster of financial conditions in the last couple of years has caught the majority of us off guard. Smaller businesses, in particular, have already been hit hard and also have suffered the worst through the COVID-19 pandemic. Now, inflation and recession fears are looming again, harming individuals and organizations alike.

In this environment, fintechs are deploying technologies for investing, accounting, payments and much more that can help their customers weather the storm. For instance, by automating manual invoicing and payments processes, fintechs are saving businesses money and time. And by giving usage of alternative investing options, fintechs are giving stock-wary investors an opportunity to grow their money.

Fintechs have always been touted as harbingers of innovation and disruption. Indeed, their very business design is made on shaking up traditional financial services. However in modern times, fintechs have grown to be a lot more than just disruptors theyre enablers, too.

Automating accounting

A trifecta of rising accounting fraud, record fines, and accountant shortages has left smaller businesses struggling to maintain. A Bloomberg Tax article, for example, describes a crisis of shortages and turnover in accounting.

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The Wall Street Journal also notes that sanctions linked to audit and accounting missteps increased nearly threefold, with businesses having to cover increasingly hefty penalties for inaccurate reporting. If that werent enough, a recently available study highlights that accounting fraud is increasing. Companies are being hit from all sides.

Fintechs, however, are employing blockchain and AI technologies to automate most of the manual tasks involved with accounting from payroll to invoicing to fraud detection. This not merely saves businesses money and time, it frees up accountants to spotlight more strategic tasks.

For example, a recently available Hacker Noon article points to how NFTs may be used to create invoices which are tamper-proof and verifiable. Not merely does this ensure it is better to detect fraud, it creates invoicing quicker and simpler. Having an automated digital ledger the blockchain businesses know that their invoices are accurate and up-to-date. One startup, Bulla Network, is even using blockchain for the whole invoicing, payroll and accounting process.

Democratizing investing

From the dotcom crash in the first 2000s and the fantastic Recession in 2008 to the COVID-19 pandemic and the most recent technical recession, todays investors have faced some a down economy.

The near future isnt looking any brighter, with The Economist noting that Gen Z can get dismal returns on the investments. In times like these, its no wonder that lots of people are wary of buying the currency markets. But fintechs are providing alternative options to diversify portfolios and grow wealth.

For instance, Gridline is really a digital wealth platform that allows usage of professionally managed alternative investments with lower capital minimums. By aggregating capital, individual investors can enter traditionally exclusive investments, such as for example capital raising funds and hedge funds, for the very first time.

Preventing fraud

Theres a veritable arms race between cybersecurity experts and fraudsters, with hackers always discovering new methods to dupe people out of these money. In response, fintechs are employing cutting-edge technologies like biometrics to avoid fraud.

For instance, FIS Global supplies a product called 3DS Flex that uses biometric authentication to verify online shoppers identities. This can help prevent fraudsters from using stolen charge card information to create unauthorized purchases.

One AI-powered example is Akkio, which enables finance institutions to build their very own fraud prevention applications. As a no-code platform, Akkio helps it be easier for businesses to generate custom fraud detection models without expensive data science resources.

Just how forward

A turbulent macroeconomic environment could be challenging for businesses of most sizes. But fintechs are employing innovative technologies to persevere and also thrive. From automating accounting with blockchain to detecting fraud with AI, fintechs are weathering the storm and driving change along the way.

Everyday investors, too, can take advantage of the power of fintech. Through the use of technology to diversify their portfolios and gain contact with alternative investments, they are able to protect their finances and grow their wealth.

Still, these technologies aren’t a panacea. Because the world becomes increasingly digital, we should be vigilant about safeguarding our data, and our money. But with the proper precautions set up, we are able to all weather the storm, together.

Valerias Bangert is really a strategy and innovation consultant, founder of three media outlets and published author.

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