FinTech has slowly but surely changed the banking industry over the last few years, giving more options when it comes to enhancing or maintaining finances. This is especially true for small business owners, who are benefitting from the easier and faster solutions FinTechs offer. With the world of open banking becoming a reality throughout the world, FinTechs are now poised to have even greater success in efforts to reach small businesses. In fact, many believe that the balance of power in servicing small businesses is shifting away from traditional financial institutions and toward FinTech companies. There is certainly evidence to suggest this as many small business owners believe alternative sources of financing (that came about as a result of FinTech solutions) are their only real avenues for attracting financing (i.e. they wouldn’t be able to get the same level of financing from a traditional financial institution).
While this all seems positive for FinTechs and their relationship with small businesses, it is important to remember that FinTech is still in its developmental stage and traditional financial institutions are starting to fight back for small business customers, combining their knowledge and resources in partnerships with FinTechs as part of an effort to maintain their small business customer base. It remains to be seen how this battle for small businesses will end, but what is certain is that creative new innovations are the key to winning this battle. And small businesses are the real winners.