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1. Businesses need to adapt fast to the acceleration COVID is bringing to digital finance solutions

From the outside there seems to be a clear direction that we’re heading in within the business world – digital finance. With its speed and efficiency being a clear desire, many businesses are beginning to turn to platforms which provide the ultimate digital finance solutions. 

Capital on Tap spoke to Matt Hicks, the Commercial Director at Codat, who shares his thoughts. “Lockdown has totally transformed the way individuals interact with businesses. From the more obvious cases such as online shopping to the more groundbreaking changes such as healthcare, like a GP consultation, or Education, such as a university lecture, becoming virtual and perhaps remaining virtual for years to come.

“The digitisation and personalisation of the application process and the free flow of relevant data from customer to bank can lead to far better customer service/ relationship management.”

COVID-19 has caused an acceleration in the way businesses are needing to adapt to digital finance. In a world that is constantly moving forward with advancements in technology, digital finance has only followed suit and therefore has meant that businesses need to become aware of how they operate financially in the future in case they get left behind. 

2. The cashless economy and ensuring economic inclusion as “digital banking apps and cashless payments aren’t an option for everyone”

The move towards a cashless future seems to be taking a step forward every day. With debit cards being the new norm to pay for items and businesses using online providers to complete transactions, the need for cash is dying out. 

Is there an argument to say that there will be a need for cash in the future? Experts share their thoughts on the future of our economy:

Pranav Sood, Head of SMEs at Gocardless comments, “By any measure, use of cash has dropped significantly through lockdown. Link, which operates the biggest network of cash machines in the UK, showed that cash usage had halved as shops shut and people worried about hygiene.

“Electronic payments have been the norm for everyday commerce for a while now and some parts of the economy and society are likely on the verge of becoming cashless. However, there are millions of people in the UK, many of whom are vulnerable, who still rely on cash. Getting to a fully cashless economy will require us to tackle some difficult questions about financial inclusion and so I think it will take a while to get there.”

Ian Johnson, Managing Director at Marqeta comments “During the UK lockdown, the contactless limit was raised to £45, cash usage halved and many retailers moved to cashless payments. This indicates that we’re seeing a significant change in behaviour, so banks will need to be ready to manage the move away from cash and ensure their infrastructure can cope with the rise in mobile, contactless and card payments. However, while COVID-19 accelerated our move away from cash, it is unclear exactly when the UK will go completely cashless. It’s important to remember that digital banking apps and cashless payments aren’t an option for everyone.”

“Many people are still reliant on cash and their local bank branches. To go cashless, we must educate society to show everyone how to live in a world without cash. Until this has been addressed, going cashless risks leaving the most vulnerable in our society behind.”

3. The future of financial management by 2030 is risk management – and it should be taken more seriously

Capital on Tap asked experts to share their thoughts on what they expect financial management to look like by 2030.

Alastair Thomson, Finance Director at FD Centre said, “The main learning for the financial sector from COVID-19 is that risk management should be taken more seriously than a tickbox exercise people pay lip service to.

“As business improvement practices mean there’s less and less slack in the system, it also means the risks to organisations are correspondingly greater when something happens.”

Moving finances to a digital format can seem like a daunting task. Although it seems digital is the future, it still takes time and consideration to ensure you make the correct decisions for your company. Capital on Tap asked experts to share some of their advice on moving to a digital finance world and things you should be aware of. 

4. Millennials – say goodbye to in-person finance solutions, the future of banking will be 100% digitalised sooner than we think

COVID-19 has produced uncertainty within the financial sector for both businesses making money and individuals taking care of their money. Financial management now seems to be as important than ever. Capital on Tap asked experts to share their thoughts on what they expect financial management to look like by 2030.

CCO of CountingUp Andrew Garvey comments, “ Banking and accounting data will have fully converged by then (2030). The challenge then will be interpreting data and using it to inform decisions rather than collating good quality data. That’s where humans will play a key role.

“Financial services have changed irrevocably as a result of the pandemic. Face-to-face interactions and transactions are becoming a thing of the past.”

Sam Short, CEO of Moneyed also mentions, “Given that Millennials don’t want in-person solutions, personal finance by 2030 will be driven by tech, big data, and applied AI. The advice gap, currently impacting 19.8 million people in the UK, will be reduced by tech and the need for financial advisors will be reserved only for complicated issues.”

“In the future, consumers can expect to manage their entire financial lives online – you’ll no longer need to visit a bank to open an account or apply for a loan” – Emma Mayer, Head of Marketing at TrueLayer.

5. Room for more? Experts reveal the growing consumer appetite for Fintech startups as “Monzo or Revolut still don’t offer as many services as a traditional bank”

With the increase in demand for cashless transactions and businesses as a whole, is there room in the FinTech space for new startups? Partnerships Manager at Xero, Ben Johnson shares his thoughts:

“There is always space for new products that help businesses. There is a challenge for new banks, as there is only so much in transactional balances to go around in the UK economy, and those with the balances have the advantage in issuing competitive loans. However more generally, what I’m really excited about is less the new fintech businesses coming to market, but more the connectivity of financial services into business applications.”

Interestingly, Richard Wagstaff CEO of Degree 53 mentions how there are still lots of gaps to fill when it comes to the finance business world. He mentions that “even established fintechs like Monzo or Revolut still don’t offer as many services as a traditional bank.”

Richard argues the case that although digital financial services may be the future, we’re still currently a long way off from making the full switch. Yes there may be room for new FinTech companies to put their stamp on the industry, but while consumers still need to visit banks and have in-person conversations, FinTech’s aren’t a necessity.

Guide: How to integrate digital finance solutions for your business

Making the big leap from moving your finances to digital format can be a scary one for many business owners. Although it seems digital is the future, it still takes time and consideration to ensure you make the correct decisions for your company.

For many new business owners, understanding information from a range of sources sometimes brings about confusion. We asked experts to share some of their advice on what you should look out for and how you can make the change as streamlined as possible.

Sarah Young, VP of Member Engagement Marketing at TIDE comments, “Think about your finances and admin as one homogenous task, rather than many small tasks and look at banking providers that can take care of as much of it as possible. Digital banking providers are able to take care of admin such as invoicing, expenses and payroll, as well as basic banking services.”

Richard Wagstaff, CEO of Degree 53, says, “Research the best provider for your needs and the types of services your business might require. Business owners often have issues with banks flagging up fraudulent transactions from their cards, so resolving these issues and activating the card or issuing a new one quickly is key for maintaining a good relationship with the customer.

“Customer experience is key. Just having a digital product won’t mean an upturn in business. Today’s users are looking for a frictionless experience at all times.” “Take the leap! Transaction fees are off putting to some traditional businesses, however in reality, people are likely to spend more digitally than with cash, so the benefit far outweighs the transaction fees.”

Capital on Tap CRO Tim Trailor shares his advice – “The main one I’d have is to shop around – understand the pricing of various accounts, but also the services they offer (a good integration into your accounting software may save you hours in the long-run!)”

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