One of the emerging technology sectors which has seen phenomenal growth in the past few years is FinTech. FinTech has had a huge impact on how businesses operate, and is especially critical in today’s world as more businesses transition online as a result of the COVID-19 pandemic. It also has brought significant changes to a number of professions, including accounting.
Traditionally, accountants were brought on to help their clients with specific tasks such as auditing or tax management, but there is an increasing opportunity for accountants to play a business advisory role to their clients. Although fintech and accounting may seem like completely different industries, both worlds are colliding more than we realise.
We take a look at the benefits of FinTech and how accountants can reinvent themselves as advisors in this space and help their clients grow their businesses by tapping into the power of the fintech revolution.
- FinTech helps clients achieve better profit margins Within a business, foreign exchange and banking fees are cost areas that are often overlooked. Not many realise that banks hide a significant markup on FX rates in the rate provided – this can be up to 5% more than the interbank rate (which is the rate you find on Google). Subscription services that are charged in a foreign currency can also incur up to 3% international transaction fees when paid via credit cards. These hidden costs can damage profitability by eroding profit margins, adding to existing cash flow concerns that businesses are already facing today.
FinTechs such as Airwallex offer competitive FX rates – for example, Airwallex offers clients access to the interbank or wholesale FX rate plus 0.3% for payments into the US. As a comparison, sending $10,000 USD into the US through Airwallex could be up to $500 cheaper than using a bank.
In addition, Airwallex issues businesses with a virtual Visa debit card, with 0% international transaction fees. This allows businesses to save further on FX costs, especially on international software subscriptions such as AWS and Shopify.
- FinTech helps clients expand internationally with ease One of the barriers to international expansion lies in financial services. Setting up a bank account in the UK or the US can be time-intensive and confusing. Furthermore, dealing with the timezone challenges can be difficult.
This is where FinTechs can streamline that cumbersome process. Airwallex, for example, provides clients with easy and immediate access to international markets by allowing them to set up local business accounts in US, UK, EU and HK within a few seconds – a task that can typically take a few months with a traditional bank.
This feature is especially critical for clients that require multi-market presence and the ability to operate in different countries quickly and effectively. Foreign subsidiaries looking to enter Australia, local e-commerce sellers looking to set up online storefronts in the US or Europe, and professional services invoicing customers overseas are examples of clients who would benefit from this the most.
- FinTech empowers accountants to work more efficiently Many accountants still have to sift through mountains of papers and spreadsheets to accomplish complex accounting and finance tasks. Not only are these manual processes time-consuming and inefficient, they are also prone to errors and can incur unwanted costs to the business.
Today’s modern software including FinTech has disrupted these traditional processes with automation, reducing the time previously spent on labour-heavy accounting tasks. For example, Airwallex allows businesses to issue an unlimited number of virtual Visa debit cards for any business expenses. These cards can be issued to individual team members or departments so you can easily track who was accountable for the expenses, which helps free up valuable time in tracking down receipts.
By freeing resources and expertise, accountants can focus on bigger value-added projects and reinvest their time to adding more value back to clients. This in turn will accelerate their personal development and unlock their full potential as both an accountant and business advisor.
- FinTech platforms are agile and easy to implement If you or your clients think that transitioning to a FinTech solution requires substantial time and effort and is only suitable for larger enterprises, this is a major misconception. In actuality, FinTechs such as Airwallex offer an all-in-one plug and play solution, with zero development required, making it a perfect solution for SMEs that are time-poor and have leaner resources.
Built from the ground up with the newest technology, FinTechs also offer more agility compared to the Big Four banks, and are able to launch and prioritise new features based on the needs of their customers. This results in partnerships that we see with the likes of Xero and Airwallex – earlier this year Airwallex launched an integration with Xero to enable SMBs to sync their multi-currency financial transactions in Airwallex to Xero on an hourly basis.
FinTech also offers potential for longer-term integrations with the wider ecosystem of tech software that businesses use today (beyond accounting software), and the ability to pair with other fintech companies for further cohesiveness.
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