Can you spend your time without mobile and not even think about it just for 15 minutes? Probably no! Similar to the necessity of food, house, and cloth, the addition of Mobile and Internet to this list is no joke for the Zoomers (Gen Z).
Have you ever thought of the increased use of mobiles and the internet, and is it really changing our lives? If yes, then how?
The most significant benefit to society is by increased use of virtual money for payment transfers to don’t need to carry it in your wallet. Let me show you. Going for dinner or ordering at home, shopping online, paying school/college fees, retirement planning, booking cab or train/flight tickets, buying your medicine, booking a scooter/car, and many other areas that might take the whole page to mention. So one can say virtual money is used everywhere. And this is probably the start of the FinTech era.
Moreover, most of the readers out there might be working somewhere and might be paid online only. Some of the organizations transferring salaries online might also be using online software. That’s where HRTech comes in.
I won’t take much time into the introduction and start with the conceptual portion highlighting these technologies in depth.
What do you mean by Finance Technology?
In layman’s terms, Finance Technology, aka FinTech, can be defined as something where finances can be handled using technology, preferably online. Some people might only see FinTech as the source of paying out for their morning meal even after forgetting their wallets at home. And that’s true also.
History Of FinTech
Traveling to the early 50s, the evolution of FinTech began with the usage of credit cards to eradicate the need to carry cash everywhere. That’s where the concept of virtual money began. The 60s was the era when the first ATM was installed (At Barclays Bank, FYI). And in the 70s, the first-ever digital stock exchange was developed. The 80s was the era where people saw the concept of digital banking, which then flourished with the fine usage of the internet and e-commerce models by the 90s.
Emergence Of FinTech In The World
Talking about the whole, the adoption of FinTech varies a lot, and it can be seen in the image. Leading the position with 1st and 2nd are China and India respectively, while the US lags with 46% only.
After the survey, the average rate of the adoption of FinTech comes out to be 64%. Compared to this rate, the average rate of awareness among the consumers with the subject of financial services and digital payment is more, which is around 96%.
Image (source: EY)
Since we have seen significant growth of this technology over the years, FinTech now has its reach to different areas like investment administration, education, fund transfer, banking, etc. You might have heard about Bitcoin, the world’s largest cryptocurrency, breaking nearly to $50,191.
Bitcoin is an emerging type of cryptocurrency. Various others like Ripple, Stellar, Litecoin, Polkadot, etc., having a major impact in the field of financial services, which people use a lot nowadays. It is also a part of fintech.
What do you mean by Human Resource Technology?
Fintech relates to the financial services being offered along with technology. On the other side, HRTech refers to the automated solution designed explicitly with the organization in mind to ease out their standard processes, which includes attendance, leave, travel, salary, and benefits administration along with analytics to ensure these business operations are working alright.
Not only managers and HR, but this advanced AI-boosted solution empowers the employees also with the self-service option.
The Overlap of FinTech and HRTech
HRTech and FinTech both use leading technologies to make life easier for the people and are thus gaining much attraction in the market.
Are you still in bewilderment about the integration of FinTech and HRTech and cannot find the link that combines them? I’ll make that task easier. Think about the organizational operations where employers and employees deal with finances.
Here are the fields where both of these technologies can deliver their combined impact to the users.
I guess this would be the first field you have thought of. Indeed you’re right. Most of the finances of an organization are linked to the payroll process of the employees. As this process is weekly, bi-weekly, or monthly, the constant monotonous task organization spends in.
As we saw, fintech comprises digital solutions for transferring and dealing with money. Bringing this to the organization can be considered a boon as it can save an imaginative time using an advanced set of tools. Additionally, it can alleviate employees’ burden in generating their IT reports, filing for returns, and investment management of the employee. Employees either take the help of the organization, or they accomplish this outside the work.
Many of the companies offer this with the help of simple and interactive user interfaces. And the use of APIs has started to integrate such solutions with payroll modules and accounting.
Compensation & Benefits
The software is yet to come from which employers can create salary structures saving enough tax, solutions for health and mental welfare, and comparing salary structures for different industries. That’s the untouched portion when talking about HRTech. Creating such solutions can leap into the history of FinTech and would probably be more helpful to organizations in using digital solutions for benefiting their employees.
I know you might be thinking about how employee recognition is related to finances. This category is least connected to an organization’s finances, but you might have heard of the employees’ digital rewards.
Many solutions in the market that deal with employee appreciation, but again, allow businesses to manage project goals and deadlines, which can be linked to the appraisal of an employee and managing employee satisfaction level. FinTech startups can design software where employees can be offered digital rewards just as people transfer payments online.
Dealing with one of the principal functions of companies, employees’ travel management, these solutions help with the configuration of travel journey based on employee classes and managing the staff’s requests of claims and reimbursements.
As the operation also deals with employees meeting management schedules outstate, FinTech companies can develop solutions where all the advance requests, claims, and reimbursement can be handled to offer the organizations in an advanced technological way.
Loan & Advances Management
Last but may not be least is the loan and advance management of the organization. When businesses step ahead to help employees in any possible way monetarily, options are there for finance technologies to take over the loan management section and digitize it for the companies’ benefit.
All Things Considered
You can see that all of these functions I mentioned above relate to any organization’s finances, which is the major operation handled by any business. FinTech companies have a good scope into the business over HRTech in all the procedures discussed above and every other function linked to any payment. These industries can develop a better future for other businesses to flourish and the new inventions of IoT, AI, blockchain, and cryptocurrency.
As both of these technologies have many aspects and common targets, they can even be integrated to offer the organization the combined influence of HR and Finance.
Our guest contributor:
Shubham Joshi is an experienced content marketer at FactoHR. Passionate about training and development programs, he is always ready to help colleagues and customers by representing concrete ideas and methodology. Beyond work, he is well-equipped with problem-solving abilities.