Fintechs are weathering the storm: How disruptive technology is driving change

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The roller coaster of financial conditions over the past few years has caught most of us off guard. Small businesses, in particular, have been hit hard and suffered the most from the COVID-19 pandemic. Today, fears of inflation and recession are looming again, hurting individuals and organizations alike.

In this environment, fintechs are deploying investment, accounting, payment and other technologies designed to help their clients weather the storm. For example, by automating manual invoicing and payment processes, fintechs save businesses time and money. And by providing access to alternative investment options, fintechs offer wary equity investors a chance to put their money to work.

Fintechs have long been presented as precursors of innovation and disruption. Indeed, their very economic model is based on disrupting traditional financial services. But in recent years, fintechs have become more than just disruptors: they are also enablers.

Automation of accounting

Due to a trifecta: rising accounting fraud, record fines, and a shortage of accountants, small businesses are struggling to keep up. A Bloomberg Tax article, for example, describes a "crisis" of accounting shortages and turnover.

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The Wall Street Journal also notes that “penalties for auditing and accounting missteps have nearly tripled as companies are forced to pay ever-increasing fines for inaccurate reporting. If that weren't enough, a recent study points out that accounting fraud is on the rise. Companies are hit from all sides.

Fintechs, however, use blockchain and AI technologies to automate many manual tasks involved in accounting, from payroll to invoicing to fraud detection. Not only does this save businesses time and money, but it also frees up accountants to focus on more strategic tasks.

For example, a recent Hacker Noon article shows how NFTs "can be used to create tamper-proof and verifiable invoices." Not only does this make it easier to detect fraud, but it makes invoicing faster and easier. With an automated digital ledger - the blockchain - businesses can be sure that their invoices are accurate and up to date. One startup, Bulla Network, even uses blockchain for the entire billing, payroll, and accounting process.

Democratize investment

From the dotcom crash of the early 2000s to the Great Recession of 2008, the COVID-19 pandemic, and the last technical recession, investors today have been through tough times.

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The future doesn't look brighter, with The Economist noting that Gen Z can expect "dismal returns" on their investments. At times like these, it's no wonder many people are reluctant to invest in the stock market. But fintechs are pr...