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How Fintech Is Set To Transform Payrolls For The Better?

May 16, 2023

Pixabay mohamed hassan Successful payroll - How Fintech Is Set To Transform Payrolls For The Better?

Image: Pixabay/mohamed_hassan

Proper payroll management is critical for the health of a business or company, and errors can have a huge impact on employees' satisfaction and, ultimately, productivity. As a result, businesses go to all lengths to ensure their payroll is as efficient as possible.

While technological advancements in the last few decades have seen payroll management transform radically for the better, fintech is set to transform it to a much higher degree. This article looks into how fintech is set to achieve this and what you can expect in the future.

Understanding Fintech

Fintech is an acronym for financial technology and refers to the integration of technology in the financial sector. Fintech technologies have one thing in common; they aim to streamline the financial sector by reducing business costs and accessibility to financial systems.

While fintech has been around for years, its adoption has not been as fast as anticipated. Still, its uptake has seen a huge spike due to the effectiveness of the technologies when integrated with other technologies, such as blockchain.

When applied to payroll management, fintech is an excellent fix for traditional problems, as shown below.

Pay on Demand

Today's society is leaning more towards an on-demand lifestyle. The entertainment industry is a good example of this shift; people are dropping cable for on-demand entertainment sources like Netflix, YouTube, and Spotify.

Employees are also looking for options that can allow them to access their earned money on demand. Traditionally employers have to wait for a week, two weeks or a month to get their paycheck. With fintech technology, employers can give employees access to cloud-based payroll solutions through mobile apps.

With the app, an employee can log in at any time and location, see how much they have earned, statutory deductions and the amount they can withdraw at that point.

Automated Payroll Systems

Not everyone may feel that having employees access to their pay is a good idea. Some may prefer that they stick to the good old payday payroll. If you are in this group, fintech can help you automate the process, eliminate errors, make the process much faster, and ensure compliance.

If your state laws require that you provide pay stubs to your employees, ensure you issue them one with every pay period. You can use this easy-to-use paystub generator to create these documents by entering the data processed by the fintech-based payroll system in three simple steps.

Access to Financial Management Tools

If employees have money in their pockets, their morale and productivity will be high. The opposite is also true. One way of ensuring employees have money in their pockets is adequate remuneration.

Providing adequate remuneration may not be enough if you do not match it with some form of financial education. Most fintech payroll platforms come with personal financial management tools that help your employees plan their budget, track finances, and offer financial literacy resources to help employees make better financial decisions.

This way, your employees will have a high chance of making better financial decisions and avoiding financial-related stress that could affect their productivity.

Data Security

Data beaches are among the most significant concerns for businesses with vast amounts of sensitive data. With the payroll having employees' names, contact information, social security numbers and bank information, its database is a prime target for cybercriminals.

Fintech platforms have come with robust data security measures thanks to the integration of blockchain technology in their development. This means all the data stored through fintech technologies is safe from unauthorized access.

With blockchain technology, a hacker would need to hack into all computers where the data is stored to get anything out of it, of which the chances are almost zero.

Mobile Wallet Integration

The traditional payroll involves a written check which the employee deposits in the bank or a direct bank deposit. But preferences for access to funds are changing, with an increasing number of Americans having an e-wallet as their preferred means of storing cash.

With fintech platforms, you can automate employee compensation directly to their e-wallets for easier access and convenience. E-wallets have seen increased popularity with cryptocurrency but are making their way into mainstream finance as a popular way of holding money in a safe space.

Final Words

The convergence of payroll management and fintech holds great promise for the future of payroll management. By embracing the technology, you will enjoy the benefits listed in this guide and stay ahead of the curve as other companies catch on.


NCFA Jan 2018 resize - How Fintech Is Set To Transform Payrolls For The Better?The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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