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Fintech vs traditional banks: Managing international collections and payments for accounting clients

25th May 2022
Brought to you by
World First logo

International business payments made easy

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How do modern fintechs compare to traditional banks for accountants managing client portfolios? We explore the differences between international collections systems for accountants.

International collections: Fintechs vs banks | WorldFirst | Image of various elements of Fintech
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Accountants have to manage increasingly global portfolios these days. The rise of digital empires and the new ecosystems that support them has led to a proliferation of cross-border business. One-fourth of global production was exported in 2018. The global pandemic has further accelerated international dependence in industry.

However, managing accounts across borders creates complexities for firms. Finding the best international collections accounts for clients remains a great way to streamline operations and satisfy customers at the same time. Clients, after all, always want the best deal while ambitious accountants are keen to make their internal processes easier.

Considering the range of international collections options available to accountants, which services represent the best balance between value and expedience? New fintechs might promise an impressive level of service, but can they really compete with traditional banks for international collections accounts?

In this article, we’ll compare the approach of fintechs versus traditional banks. We’ll first explain why fintechs emerged to solve the issues with international payments, before identifying what accounting firms should look for when hunting for their ideal solution.

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Fintechs vs traditional banks: Where did all the fintechs come from?

Banking never used to be this competitive. Regulations were prohibitive for new players, leading to a consolidation of banking brands. Traditional banks prioritised their risk exposure with little motivation to create streamlined experiences for customers. 

Application processes for international collections at traditional banks were slow and frustrating (which often remains the case today), requiring a lot of documentation to open accounts. Although accountants are more than capable of overcoming such bureaucracy, inefficiency creates additional costs, with more staff required to perform tedious tasks that don’t make the best use of their expertise.

Furthermore, incumbent brands in banking failed to adapt to the digital revolution fast enough. In the wake of the financial crisis, efforts to increase competition in the banking industry led to the perfect conditions for competitive, specialist services to emerge: fintechs.

Who won?

Application processes for international collections accounts are still awkward at traditional banks. By contrast, fintechs have made it easier than ever to get the benefits of international settlement without the hassle. Even the quickest traditional banks can sometimes take weeks to set up accounts for international collections.

Delays in the application process could result in the loss of optimal exchange rates, to say nothing of the persistent administrative headache archaic systems present to accountancy firms. Traditional bank accounts are also frequently inflexible with the timing of their payments, making them ill-suited to the round-the-clock nature of the modern economy.

While it’s true that traditional banks still enjoy considerable influence in the sector, fintechs have successfully carved out niches with agile services that are making a significant difference to accounting firms.

Choosing wisely: Factors to consider when assessing international collections accounts

Accounting firms should consider several factors when choosing which fintechs to partner with. Not all fintechs are created equal, especially given the complexity of managing client portfolios with international interests.

The best candidates should demonstrate the following:

  • Global reach: Settlement options across multiple currencies with experience serving customers worldwide, especially in the unique and highly lucrative Chinese market.
  • Speed: Quickly make spot payments and set up forward contracts to ensure your clients always get the best deal.
  • Integration: The right fintech should seamlessly slot into your accountancy software for maximum simplicity.
  • Human touchpoints: Robots are great to a point, but when you need to speak to someone, you can.

What can the right international collections account do for your firm and your roster of clients?

Ease of use for accounting teams

Accounting teams can benefit from rapidly settling international invoices and payroll. Using services like WorldFirst, accountants can automatically sync transactions across ten of the world’s most widely used currencies with full Xero integration. 

WorldFirst accounts also instantly reconcile transactions, reducing admin for accountants who only need to connect their clients’ International Collections Account to Xero. Automated recurring payments and bulk file uploads also help save even more time for accountancy teams, leaving your staff with more time to use their expertise to drive business growth further.

Maximum client convenience and expedience

Accountancy clients themselves also directly benefit from fintechs like WorldFirst. As accounting firms take less time preparing accounts and reconciling transactions, clients enjoy the benefits of their partnerships with accounting firms faster than ever.

Accounting firms can also increase their value by taking on a greater advisory role, offering insightful feedback on improving client processes. By expanding the range of services accountants can offer, firms can simultaneously increase their revenue potential and enjoy more satisfied customers. 

Traditional banks struggling to keep up with fintechs

Traditional banks have yet to mount a significant challenge to fintechs in the arena of international collections accounts. For accountants, ensuring that their provider has a global reach, human touchpoints and maximum flexibility in-built is key to offering the most competitive service and, therefore, retaining their clients.

Armed with an understanding of the competitive landscape, there is nothing stopping accountants from making their processes easier and improving their client satisfaction scores at the same time.

Manage international collections and payments for your clients with ease

WorldFirst’s accounts are designed to help you quickly and easily set up spots and forward payments in up to ten different currencies from one dashboard. Our International Payments Account is optimised for speed and security with every transaction.

Lock in fair rates with forward contracts, or pay unanticipated costs safely and securely. Over 240,000 businesses have used our services, sending more than £87bn worldwide to date.

Join a growing number of accountants and bookkeepers from around the world and discover the best way to manage your client portfolio. 

To find out more about WorldFirst account options, visit our WorldFirst website or give us a call on 020 7801 2388 or email [email protected].