How cloud technologies and services have revolutionised the Finance sector
The impact of Cloud technologies across a number of sectors from entertainment to buying property has been pervasive although not entirely obvious. How many people really know that BBC iPlayer or checking a Facebook update is only possible because of the Cloud? The finance sector is no different and whilst initial cloud adoption was largely confined to the recondite atmosphere of high-frequency trading environments, the impact elsewhere has been nothing short of revolutionary. Here are my Top 3 Cloud Finance disruptions.
Disruption 1 – Raising Money
Despite TV advertising campaigns telling us that banks are fair and lending to small businesses, the truth is that without personal guarantees or assets everyone from start-up entrepreneurs to established ‘mom and pop’ shops struggle to get traditional banks loans and overdrafts to support them. Inevitably, alternative ways of raising capital have become popular and some of them are built on cloud-based architecture. The rise of crowdfunding from lending money (in small and large chunks) to raising capital by exchanging equity to gifting services has all been made possible by the cloud. The cloud has meant that small companies can connect with small sponsors and professional investors (known as ‘angels’) easily. Digital broker platforms such as The Ideas Factory, Crowdcube and SeedRs has made the process of raising capital more effective in terms of cost, efficiency and speed. With one in three new businesses failing in the first year of operation, the crowdfunding platforms have not only succeeded in raising funds quickly but also providing critical expertise and experience which should bear fruit when it comes to success rates. By the time a traditional bank has got their obligatory trading record and bank account history, a start-up may already have gone to the wall due to lack of cash-flow.
Disruption 2 – Tracking Money
Many small businesses keep little more than a cashbook or spreadsheet to track debits and credits. Worse they then manually cross-reference bank statements and create customer invoices using a word processor. Keeping track of the pennies is tough enough without creating more mess to try and keep on top of it all. Today’s cloud accounting services allow businesses to get to grips with tricky finance tasks and significantly reduce the number of hours needed by simplifying and consolidating accounts activity. So whether it’s recording bank payments, looking at cash-flow, creating invoices, running a payroll or helping with the tax return, there is a cloudware service out there that can help.
Managing finances in the Cloud means that all data is sitting in one centralised location, making it easy for the company accountant to access and pick up where they left off and ensuring that all those vital tax returns are completed on time. Thanks to military-grade encryption methods, Cloud accounting is also extremely secure.
Disruption 3 – Accepting Money
The ability to allow customers to make instant, convenient and safe payments from a desktop, laptop, smartphone or tablet will make all the difference for those wanting to run a successful business in the online world. There is an abundance of cloudware options which enable organisations to make and receive payments in multiple-currencies and support alternative payments options in emerging countries with robust fraud prevention built-in. Even in the offline world, cloud based payment systems are revolutionising the way customers receive services. For example, restaurants using tablets to take orders (as well as ensure accurate bills!) to buying the latest gadget in an Apple store where electronic receipts are de rigueur. New companies like Kounta offer an innovative point-of-sale solution which combines store management and inventory with ordering and customer loyalty. The ability to sign-in and work from anywhere means sales, product performance and reporting are always available in real-time on any device. In practical terms if a small café has been selling more blueberry muffins which have sold-out by 8am rather than 10am, the owner can see this at a touch of a button and react accordingly.
A New Normal for Finance
Despite these significant finance Cloud disruptions that make it easier to start and run a small business, the adoption curve has been slow given the cost, performance and scalable benefits of cloud delivered services, applications and software. At Compare Cloudware, we support the growth of start-ups, small businesses and entrepreneurs to easily compare and find cloud delivered finance services from payment gateways to accounting software to payroll for free. The world is open for business and small business can now access markets with financial cloud services that are not only more flexible in terms of cost but fundamentally better and more connected to customers and suppliers. Is this the dawn of more open, efficient, transparent and competitive financial services industry? Yes absolutely, but everyone needs to know about it!
With over 20 years’ experience in the technology and communications industry, Gary has worked with a number of major global brands holding a senior position with corporations such as Verizon, Virgin Media, BT and Cisco. He is now am CEO of Compare Cloudware, the first dynamic comparison website showcasing cloud applications, services and applications that are right-sized for start-ups and small businesses.