FinTech may be an evolving sector within payments, at times with so much fluidity that would-be customers may not know just what they can glean from those new companies, especially when it comes to banking and moving money across borders.
In one series of statistics that speaks to at least some lack of visibility of FinTech among small to medium-sized enterprises – and where there is room for improvement – World First released the results earlier this month from a survey of 500 SMEs.
One headline number: Nearly half of those owners, at 49 percent, did not have an opinion as to the meaning of “FinTech” as it might relate to their own businesses.
In an interview with PYMNTS, Mike Ward, CEO of North America for World First, said that number, among others, “shows the challenge” that lies before FinTech, which is in fact, an industry that is a decade old. That means there is room for brand recognition, which in turn means that some education is needed among SME, “who may not be aware that there are alternatives” to traditional banking relationships.
In the survey, 39 percent of respondents said the twin concerns of safety and security were the most important upon choosing a payments provider. That topped the 28 percent of respondents who said that low fees reign supreme when choosing a provider. Drilling down into safety and security, respondents said a number of processes tied to electronic payments would be helpful in making a company feel safer about electronic payments. The visibility into the transfer process took the top spot, at 39 percent, and the ability to have control over payments came in at 35 percent. Some human touch also seems to be important, as 27 percent want customer service support and 21 percent, dedicated account managers, models that were noted by Ward as “high-touch” ones with small business owners used to walking into branches in order to talk to tellers and other officials.
The interest in FinTech is not insignificant among SMEs, with 33 percent stating that they are “eager” to work with FinTechs; that dwarfs the 20 percent who stated that they are not, in fact, eager to work with those technology upstarts.
But clearly banks could use a little help in the perception department. Some 19 percent of respondents said they viewed banks as “useful,” and another 17 percent agreed that the institutions were “OK or fine,” with another 19 percent saying they were “greedy.” What should banks tackle? Better customer service, said 46 percent of those surveyed, with 36 percent stating that transactions should be speedier (and a full 50 percent of SMEs say financial institutions should transfer money between countries in two days or fewer). With all those desires in place, for speed, visibility, security and also human interaction, said Ward, partnerships between banks and FinTech would bring credibility to each side of that relationship.
As digital payments make inroads into how businesses do business with one another, international expansion does indeed garner notice. Among the countries most desired as a destination for business expansion: Canada, with 24 percent of respondents. That speaks to what Ward referred to as “a comfort level” with doing business in that country (from the U.S.), whether moving goods or services, with comfort extending across a common language and even regulatory structure.