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Fintech booms at Accountex

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24th May 2017
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Fintech became one of the buzz words batted around the Accountex trade show this year.

The fintech revolution has really come into its own. But Fintech is such a broad term. It can be used to describe the exponential growth of Bitcoin to Paypal, one of the first examples of alternative payments. Being such a nebulous concept, it's no wonder the term can be a bit inaccessible for the average high street accountant.

What emerged from Accountex though was the growing number of vendors operating in the alternative lending and payments space. The rise of alternative finance and lending has been gradually gaining traction since the financial crash, when trust shifted away from the major banks.

Over the last year, a number of new fintech players have hit the accountancy market and challenged the major banks on cost.  

Everyone's talking about fintech

But has this buzzword trickled down into the mainstream? As fintech continues to gather steam, AccountingWEB’s Richard Hattersley and Tom Herbert caught up with Sage, 9Spokes, FreeAgent and Natwest, and discovered what it means for accountants now and in the future. 

The interest in this new technology isn’t just consigned to trade show exhibition halls. As a recent Any Answers question from AccountingWEB regular HeavyMetalMike shows, alternative lending is now a viable solution for some clients.

Alternative lending in action

As accountants gradually veer away from traditional methods such as brokers, overdrafts and loans, some accountants, as HeavyMetalMike explained, fear that this source of funding is “too good to be true”.

Alan Hemingway, owner of Hemingway Bailey, recently told us how alternative lending has enabled some of some of his clients to access funding quickly. “They can apply online and firms such as iwoca say they can get decisions back in three-and-a-half minutes.”

Although alternative lending has given clients quick access to funds, this option still has its detractors. Some accountants unfamiliar with the world of fintech are put off from recommending these arrangements after swotting up on the subject.

When trying to understand the fintech options available, AccountingWEB member newmoon investigated typical arrangement fees and interest rates, and wasn’t completely sold on the result. “[It] seems pretty restrictive and quite expensive, compared to a bank, but maybe I'm misunderstanding it. Is it intended as stop gap finance to enable people to react to an opportunity quickly, then arrange more cost effective finance over the following few months?”

Bank collaborations

While many accountants are waking up to the benefits fintech presents, the trend is sure to garner more mainstream attention as software companies collaborate with high street banks. FreeAgent’s recent partnership with Royal Bank of Scotland/Natwest ushered this burgeoning tech trend into 2017.  

However, FreeAgent is not the only cloud accounting vendor to adopt web finance. Xero exported a similar arrangement in place in New Zealand, announcing integrations with Market Invoice, iwoca and Due Course.

Business editor Tom Herbert met with FreeAgent's Kevin McCallum and NatWest's Haydn Thomas at Accountex. They told him more about the origin story of their strategic partnership, and what fintech could mean for accountants moving forward. 

Watch more videos from Accountex 2017 in our YouTube playlist

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