Neil Slonim, founder of the online resource centre 'The Bank Doctor', recently presented to three groups of Certified Practising Accountants and only one in 80 could name an SME fintech lender. I asked around my own network and had similar and worrying results.
How does that sit with you? Are you familiar with fintech lending? Do you know a fintech lender? Do you care at all?
Although fintech and accounting may seem like two disparate industries, the truth is these worlds are colliding. While accountants, often the first point of call for business owners in need of financial advice, have an obligation to know about fintech lending there is also a significant opportunity for them in this space.
If you don’t know much about fintech lending and are still wondering 'what’s in it for me?' read on for my take on the opportunity and what accountants can do to get a jump on the competition.
Financial services to be centralised in accounting software
Accounting software will soon be linked directly to fintech lending platforms to streamline credit applications. We have also already seen a partnership between Xero and a major bank to enable credit applications to be made via accounting software.
As these integrations and partnerships become commonplace and fintech becomes more ingrained in accounting software, we will see financial services centralised in an accountant’s domain – cloud accounting software solutions.
So what does this mean for an accountant?
• A competitive edge – given the increasing importance of accounting software solutions, it makes sense for business owners to go to their accountant for financial advice.
In order to provide great advice, an accountant requires a complete picture of the lending environment, including traditional funding solutions and new fintech lending options.
Savvy, early adopters who are ‘in-the-know’ about fintech lending will be able to position themselves as experts to gain a competitive edge. Because traditional lenders can’t or won’t lend to small business and fintech lenders will, accountants can add value to clients and reap the reward of customer loyalty.
• Get great results with little effort – fintech SME lenders can make life easier for accountants. Traditionally, accountants took a hands-on approach to managing credit applications for clients – preparing BAS statements, P&Ls and budget forecasts with a fintech lender an accountant can be totally hands-off.
Fintech lenders have fast, efficient and easy-to-use processes and platforms. For example, a credit application with Spotcap can be completed in as little as five minutes and financial data can be pulled directly from an accounting software application. Once complete, lines of credit are approved and made available within 24 hours. It’s as easy as that.
Recently, I wrote about the need for fintech lenders to prioritise increasing brand awareness in the SME community. The onus is also on fintech lenders to raise awareness within the accounting and advisory community, but that doesn’t mean accountants shouldn’t play an active role and embrace the opportunity.
I encourage accountants and advisers to keep an ear to the ground, seek out alternative lenders and learn as much as possible about the products and services on offer. This need not be an arduous process – pick up the phone or send off an email to a fintech lender and they will happily tell you everything you need to know.
Lachlan is the Managing Director of Spotcap Australia and has more than 15 years’ experience in financial services, both in Sydney and New York. He has witnessed the profound impact technology can have on financial services and is passionate about using technology to support Australian small businesses.