Meet FinTech, the rapidly rising star in the start-up world, a combination of the words ‘financial technology’, is the biggest story in start-up growth in the last two years. While the term has been around for several years, FinTech really came into its own in 2015.
The FinTech industry is booming. Global investment in the sector hit over $24bn last year. More than $12bn was invested in the US alone with over 60,000 people working in the UK FinTech industry. At London FinTech week in July it was revealed the sector generates £6bn in annual revenue in the UK alone.
But what is FinTech?
FinTech – refers to companies using technology to help solve issues or challenges regarding the financial aspects of individuals, businesses and governments.
While originally defined as the obscure backend processes of setting up servers and software applications for the frontend of traditional banking institutions, the definition has exploded along with the industry’s growth. Specific definitions tend to vary quite a bit from source to source, but many follow the same basic idea of using technology to disrupt the traditional financial services sector.
FinTech, as we understand it today, is a very young industry. Two of the oldest companies in the game were only founded in 2005 and 2006. Fintech could best be defined as an economic industry composed of companies using technology to make financial systems more efficient. This industry is a quickly evolving technological umbrella covering many different and diverse ideas related to the financial services industry.
How is FinTech changing business and HR processes?
The constantly evolving face of financial technology start-ups covers a wide variety of technologies and services with a commonality to increase business processes accessibility and speed.
For businesses, the accessibility gained is immediately obvious. Utilising much faster, easily available internet connections, big data computing, and mobile connectivity, businesses are now able to buy in to complex, feature rich financial software suites and managed services. Even a decade ago this would have cost thousands and thousands of pounds in setup fees for equipment, programme licenses, and trained technicians, not to mention the IT team to manage the whole solution.
Smarter displays of information with real-time updates and the insights of big-data have provided business leaders with unparalleled business insights. Those same factors also allow businesses to provide a similar level of enhanced accessibility to their customers. Greatly improved software designs and user experiences, fast internet bandwidth, and the universal adoption of smartphones has provided real-time access to financial information and transactions at a level never before possible.
For most organisations ensuring all income and expenses are accounted for is a basic necessity. What follows closely is the salary processing and payroll process fundamental to businesses and its people. It is the most crucial and essential link between FinTech & HRTech.
While payroll seems to be the most logical entry point for FinTech companies. The obvious benefits to help employees file their tax returns right from the payroll solution and to providing visibility to managers and accessibility to employees to manage their expenses, travel, rewards and holidays empowering staff and freeing up managers to concentrate on more important tasks.
Make sure you get it right from the outset
When you launch a business you will know exactly how many people work with you and you will easily be able to communicate with them. However as your business grows it will become harder to keep tabs on what is going on.
Leaders can be so focussed on building and growing a business that you might still be using spreadsheets to control hundreds of employees with the same processes as you did when you were a team of five. But if you realise this when you reach three or four hundred employees, then suddenly the task of managing your people and how you keep track of personal information becomes a business-critical issue.
FinTech companies are experts when it comes to the power of using automation to deliver more efficient transactions and processes, such as payment processing or financial trading. So, if you’re automating transactional activities for your consumers, why not for your employees, too? You could, for example, automate key tasks such as booking holidays, managing performance reviews and buying additional employee benefits.
HR teams are moving towards automating a lot of the traditional ways of working, and giving their employees autonomy to do things themselves. It means HR and people teams are free to focus on staff development and building great workforce experiences to engage staff.
Practice what you preach
It may seem obvious but if you’re an innovative company, then the technology and approaches used to manage your people should reflect this. If your business is agile and responsive, then you need processes and technology which are flexible and responsive.
When it comes to managing and supporting your workforce, your HR, payroll and people systems must be accessible by everyone. This means having instant on-demand access on any device, at any time. What’s more, it needs to be easy to set up and use for staff to spend their time focusing on your customers.
You will want to attract the best to work for you, with employees and future employees likely to be tech savvy, using mobile technology on the go, working remotely and potentially across different time zones.
How you treat your employees will mean you attract, and keep, the best people
Employer brand is a term often used by blue chip companies– they have a strategy in place to attract and keep the best people. They recognise the right staff are an asset and ensure their staff reflect its values through all business processes, externally and internally.
You might collect data on your customers for marketing purposes and will want to know their buying habits. Ensure you know your people as well as you know your customers, treating them as well as you do your customers. They’re just as important to growth – if not more.
Protecting yourself from security risks and data breaches is vital to protecting your brand reputation
You know the importance of protecting customer data, we’ve already covered this in our white paper on GDPR. link to article It has to be a high priority for you as you grow your business, reputations which take years to build can be damaged in hours if you don’t get it right.
Do you have the same security measures in place for your employer data, though? With GDPR coming into effect next year, it’s important to get this underway now.
If you’re scaling up, make sure your employee data is secure, cloud-based, and sufficiently mitigated against risks. Getting this right as you scale up will solve you a whole range of potential issues later down the line.
Nurture your employees to get the best from them
Whoever you employ in the start-up and scaling-up phases of your business can be critical for the growth and success of your business It’s vital to attract the best – and once you’ve got them, hold on to them. Giving your employees great workforce experiences is vital to this.
Can your company culture can be identified as soon as you enter the workplace or meet a team? Employees know if they’re valued, this will be reflected in the output and quality of their work and want to feel truly engaged, empowered and inspired.
This is also why we’re seeing the emergence of chief people officers in tech companies. Fast-growing organisations scaling up are automating the administrative tasks leaving their HR teams to concentrate on people and employee experiences.
Want to find out more about a cloud-based automated HR and people system? Request a demo click here.