HOW BANKS AND FINTECH COMPANIES CAN HOLD THE ECONOMIC FORT TOGETHER

Recently, a UK based FinTech company came up with a tool to assist businesses in securing loans based on their past incomes as a collateral. Once fully operational, this tool could be a great support for smaller businesses to stabilize their revenues and keep afloat in these uncertain times

- Hozefa Muchhala

The phrase, “When the going gets tough, the tough get going” holds true now more than ever; and testimony to this are several FinTech companies that are stepping up to the ongoing global health crisis and brainstorming innovative solutions within the confines of their homes.

The virus is moving at a rapid pace and whilst the government is rolling out several initiatives and funds to support the masses, it cannot be denied that SMEs and MSMEs are facing the brunt of the economic downfall. Without strategic support from larger financial entities, these businesses will not be able to survive the storm for long.

Two sides of the same coin

The past year had already promised greater collaboration between banking and FinTech firms with the aim of quality solutions for customers. This year, as we enter the second quarter with anomalous challenges hovering over the global and national economy alike, banks and NBFCs need to come together to innovate and create relevant solutions for people and enterprises while addressing liquidity and credit concerns at the grassroots level.

Banks have worked relentlessly over the past 20 years to produce sticky solutions for businesses and customers. However, a lot of traditional banks that want to deploy and lend funds, are willing to do so but are not operationally equipped for the same as they are used to lending in a more traditional mechanism. They are getting overwhelmed by loan requests from small businesses. Thankfully, FinTech companies are built with technologies that can help approve loan applications in a much faster manner, scale accordingly, and get money to where it’s needed the most.