FinTech for the Future: Thinking Beyond the Pandemic
Historically, organizations operating within the transport and logistics area have been slower to adopt new technologies. These industries rely on a complex infrastructure that must be perfectly balanced to maintain business continuity, which means many business owners and decision makers take the “if it ain’t broke, don’t fix it” approach when it comes to technology and payment processing.
But as the pandemic peaked in 2020, it spurred businesses across the logistics ecosystem to rethink their stance on mobile payments for security. Covid created an increased need for fast and practical financial processes that enable contactless and socially distanced payment transactions.
A global health crisis arguably brought logistics and supply chain fintech into the mainstream. Today, advances in software, hardware, infrastructure and mobile payment technologies are more accessible and affordable than ever before. But when the industry thinks about the future of fintech, the truth is that these solutions have a much broader application than just addressing challenges that have emerged in the last three years.
If you’re a business that hasn’t invested in fintech in the past two years, but is considering options for the future of your organization, here are three questions you should ask to determine how fintech can fit into your operations and support revenue goals.
Do I have a cash flow problem?
Cash flow problems occur when a business does not have enough liquid cash to cover its obligations. When money leaving the business exceeds money coming into the business, an organization may struggle to pay debts and meet other expenses. Cash flow challenges affect many companies and can stem from low profit margins, overinvestment in inventory, or problems with invoicing and collecting payments.
If these challenges sound familiar – especially around invoicing and payment collection – fintech solutions may be a good fit. These technologies support faster payment collection, bringing cash quickly into your business. This faster payment collection can also increase the stability of income streams. When a supply chain or logistics company goes mobile with its payment collection practices, it can begin to forecast weekly and monthly revenues more accurately as there will be minimal collection delays.
Steady cash flow to pay your employees, cover expenses and provide a cushion against bumps in the road is essential. Fintech technology not only increases stability, but adds an extra level of security by protecting against chargebacks. If you haven’t prioritized upgrading your payment process for the sake of financial stability, it’s time to bring it to the fore.
Where can I make operations more efficient?
For supply chain companies looking to adopt fintech beyond pandemic-era use cases, the next thing to consider is your current operations. Slow operations are often a byproduct of manual processes. When it comes to payments and transactions, streamlining operations looks like switching away from paper and adopting digital systems. If paper payments are shutting down your business, it’s time to consider fintech solutions.
The average B2B paper invoice costs $17 with a 10-day processing period, and the entire lifecycle of a B2B transaction takes a slow 34 days. Just like strong cash flow, efficient operations will make it easier for supply chain companies to operate efficiently. Take, for example, a repair and towing business. Processing cards or fleet checks in the field can potentially tie up both drivers and employees, preventing them from moving on to the customer. It also ties up dispatchers, forcing them to spend their time entering credit card information instead of taking calls from new customers. There is also extra work for back office staff, who often handle information and spreadsheets manually.
By digitizing payments and investing in fintech, businesses can improve operational efficiency in the warehouse and on the road, making it easier to collect payments, support multiple payment options and ensure there isn’t a paper invoice or receipt to keep track of. By embracing digital payments, logistics companies can reduce reliance on paper, enable real-time mobile payments and increase ROI.
How can I increase my visibility?
Finally, business owners in the logistics and supply chain need to determine whether they have visibility into all revenue-related activities. Do you have access to a holistic view that shows where money goes and comes from? Do you have an accurate picture of your company’s data? Are your back office activities integrated into a unified space?
If this is a challenge you’ve encountered, fintech can be a piece of the visibility puzzle. The innovative technology keeps a digital record of all transaction activities. These credible financial statements equip business owners and operators with a clear picture of the business’s financial health. Additionally, when you have all payment and transaction information available in one view, business owners can more easily make strategic decisions about a business, its priorities, operations and long-term investments.
Fintech’s supply chain future
Fintech went from a “nice to have” to a critical component of business continuity during the pandemic. However, it doesn’t stop there. For logistics and supply chain companies looking to renew revenue efforts, increase operational efficiency and increase visibility, fintech should be a cornerstone of an ongoing strategy that enables logistics partners to work more effectively with each other. As an industry, we need to think bigger, demand more from our technology and use it to create lasting impact.